Würth Group - Annual Report 2015€¦ · BUSINESS UNITS SHARE OF SALES Divisions of the Würth...

www.wuerth.com

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CONTENTS

1 UNDERSTANDING VALUE

16 COMMITMENT

18 Experiencing art and culture 22 Sharing commitment 26 Shaping education

30 BULLETIN

30 Report of the Advisory Board 32 Report of the Central Managing Board

34 THE BOARDS

34 Legal and organizational structure of the Würth Group 35 Advisory Board 36 Central Managing Board 38 Customer Advisory Board

39 GROUP MANAGEMENT REPORT

39 The Würth Group 40 Economic environment 41 Business development

42 Sales by region

46 The business units of the Würth Group

46 The divisions of the Würth Line

50 The units of the Allied Companies 51 Electrical Wholesale unit

52 Trade unit 53 Production unit

54 Electronics unit 55 RECA Group unit 56 Tools unit

57 Chemicals unit 58 Screws and Standard Parts unit

59 Financial Services unit

60 Net assets, fi nancial position and results of operations 66 Research and development 69 Risk and opportunities report 75 Employees 78 Corporate governance report 79 Subsequent events 79 Outlook

81 CONSOLIDATED FINANCIAL STATEMENTS

82 Consolidated income statement 83 Consolidated statement of comprehensive income 84 Consolidated statement of fi nancial position 86 Consolidated statement of cash fl ows 88 Consolidated statement of changes in equity 89 Consolidated value added statement 90 Notes on the consolidated fi nancial statements

AT A GLANCE »

ANNUALREPORT Würth Group Fiscal Year 2015

BUSINESS UNITS

SHARE OF SALES Divisions of the Würth Line

2015in %

2015in millions

of EUR

2014in millions

of EUR

Change in %

Metal 16.0 1,765 1,661 + 6.3

Auto 13.6 1,502 1,423 + 5.6

Industry 10.7 1,180 985 +19.8

Wood 10.1 1,124 996 + 12.9

Construction 6.2 686 638 + 7.5

Total 56.6 6,257 5,703 + 9.7

Würth Line

Allied Companies

2015in %

2015in millions

of EUR

2014in millions

of EUR

Change in %

Electrical Wholesale 10.7 1,186 1,001 + 18.5

Trade 7.2 796 746 + 6.7

Electronics 5.5 609 552 + 10.3

Production 5.5 605 568 + 6.5

RECA Group 4.8 527 499 + 5.6

Tools 3.5 381 369 + 3.3

Chemicals 2.2 240 236 + 1.7

Screws and Standard Parts 2.0 225 232 – 3.0

Financial Services 1.0 111 106 + 4.7

Other 1.0 110 114 – 3.5

Total 43.4 4,790 4,423 + 8.3

SHARE OF SALESUnits of the Allied Companies

395

The consolidated fi nancial statements of the Würth Group are prepared in accordance with the International Financial Reporting Standards (IFRS).* Earnings before taxes, amortization of goodwill and fi nancial assets, and changes recognized in profi t or loss of non-controlling interests

disclosed as liabilities

WÜRTH GROUP 2011 2012 2013 2014 2015 Sales in millions of EUR 9,699 9,985 9,745 10,126 11,047Employees No. of 66,113 65,169 63,571 66,044 68,978Pre-tax operating result * in millions of EUR 395 415 445 515 525Return on sales % 4.1 4.2 4.6 5.1 4.8EBIT in millions of EUR 450 448 495 554 572EBITDA in millions of EUR 736 762 798 831 903Net income for the year in millions of EUR 271 279 309 378 434Cash fl ow from operating activities in millions of EUR 540 618 599 612 630Investments in millions of EUR 455 465 433 367 525Equity in millions of EUR 3,042 3,204 3,399 3,683 4,083Balance sheet total in millions of EUR 7,771 7,649 7,978 8,142 9,210Rating by Standard & Poor’s A/stable A/stable A/stable A/stable A/stable

THE WÜRTH GROUP AT A GLANCE

SALESWürth Group in millions of EUR

3,000

6,000

9,000

12,000

3.0

6.0

2012

Operating result in millions of EURReturn on sales as a percentage

2011 2012

415

2013 2015

9,745

11,047

2013 2015

445

5259,699

2011

9,985

OPERATING RESULTWürth Group in millions of EUR

150

300

450

600

2014

10,126

2014

515

1

How much would you be prepared to pay for an hour of leisure time?

Someone gives you an expensive present. Are you less happy

when you find out that the person got it on the cheap?

Would you rather do without your favorite food forever or

never watch TV again?

If you could only save five of your personal

possessions from destruction, which

ones would you save?

What do you value more: achieving something yourself

or helping others?

What would you choose: A three-week trip to

an unknown destination or EUR 3,000?

Would you buy a guarantee to live

until the age of 100 if you knew that all

of your friends would die before you?

What is more important to you:

Your car or your pet?

Would you opt to experience something you have always dreamed of if you knew that your memory of it

would be erased as soon as it was over?

When was the last time you sacrificed something that was important to you?

Imagine if your life was being filmed. Would the cinema ticket be

worth the price? HOW MUCH

DO YOU

THAT?

2

A QUESTION OF VALUE

4

»A THING IS VALUED ACCORDING

TO ITS PERCEIVED USEFULNESS

TO MANKIND.«Eberhard Friedländer,

German economist (1799–1869)

55

What would the world be without value? A collection of atoms colliding without any meaning.

What we do and think are what give things their value.

6

here is one thing that everyone agrees on: Values are a good thing. We all need values. Our values are the things we have to protect, the things that are worth fighting for. But the term itself is a confusing one. We talk about ethical values like justice, freedom and tolerance, but also refer to

the value of property or assets. Values can also change and vary from culture to culture – and sometimes even from individual to individual.

“Value” means two different things. In financial terms, it refers to the monetary equivalent of a particular object, i.e. its price. We talk about valuables, the value of a company, a gold coin or a share. In this sort of context, something is considered to be “of no value” if nobody is prepared to pay any money for it. On the other hand, we use the word “value” to refer to the significance or importance we attach to a certain thing. We talk about the artistic value of a painting, the value of a scientific dis-covery, religious or ethical and moral values. When we talk about value, we are always referring to something positive in our lives.

The value of something expresses how much we want it because it benefits us in some way or another. So values have both a subjective and an objective component. Not everyone defines value in the same way. The teddy bear you have kept since childhood might only be important to you. At the same time, however, things have an objective value – one that is either intrinsic to the object itself or relates to the things we can do with it. Friendship, for example, is of intrinsic value. We generally aim to establish friendships

THE VALUE OF VALUESNowadays, the word “value” seems to be on everyone’s lips. But what does the word “value” actually mean? How do values come into being – and what standards can we use to measure them?

because they are valuable per se. The value of a hammer, on the other hand, is associated with the fact that we can use it to hammer nails. But the question as to when something is really something we “value” also depends on what we are prepared to sacrifice for it – our money, our efforts, our working hours, our behavior. On the next few pages, we want to give you some insight into the manifold dimensions of the term “value” – and encourage you to think about your own values.

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7

CREATING VALUE!

VALUE IS QUALITY. Quality starts with an idea of perfection. With the idea of creating a product of the very highest quality. It might be a screw, a ladder or a caliper: There has to be unity between form and function. Quality is evident from the material and the design. A high-quality product is something people can get excited about instantly. And something that wins them over in the long term.

VALUE IS ABOUT HOW USEFUL SOMETHING IS. The customer is king. Customer demands set the standards for excellent service. Customers know what they need: optimum, innovative, precise solu-tions. The best proof of a product’s value is individual satisfaction. People who are not satisfied with a product or service does not simply hide away and say nothing. They talk about it. The things that are useful to one specific individual should also be of use to others.

VALUE IS WHAT REMAINS. In today’s fast-paced world, nothing is more important than sustainability. The voices calling for consistency are getting louder and louder in a world characterized by economic and technological change. Reliability is important. We want to surround our-selves with people and things we can rely on. The things we value are not the things that have to be replaced again tomorrow, but the things that endure. And the things that keep going, and going, and going.

VALUE IS ABOUT WHAT YOU ARE PREPARED TO PAY FOR. If you buy a product or service, you are buying an experience. If you invest your money in quality, then you can be certain that the experience you are investing in is worth a great deal more than the material value. Building a house, for example, is not just about the actual structure being built. It is about the way of life you are creating along with the property. Someone’s own house is their home. A place where they belong. This is priceless.

VALUE IS ABOUT THINGS THAT HAVE BEEN HANDLED WITH CARE. What do you need if you want to manufacture good products? Time. What do you need to turn good service into excellent service? Purpose. It is exactly the same in the world of art: A few random brush strokes are not enough to produce a valuable painting. In order to ensure that the artistic work can win over laymen and connoisseurs alike, you need a creative process, expertise, technique, and endur-ance. There is no such thing as real value creation at the touch of a button.

VALUE IS PERFORMANCE. Performance, in the very best, valuable sense of the word, already holds the key to success. It is never some-thing achieved by only one individual, but by a team striving to achieve a common goal. An undertaking can be described as a success if it ultimately results in an outcome that visibly makes sense – a unique achievement that people can build on. Any major innovative achieve-ment deserves attention. All of these achievements set standards for economic and social progress.

VALUE IS ABOUT SHOWING APPRECIATION. In order to work well, people need an environment characterized by recognition and respect. Employees and managers can only develop their full potential in an atmosphere of mutual respect and appreciation. Only then do they feel free to show what they are capable of: what their assets and skills really are. Someone who feels that their actions are appreciated, and that they are valued as an individual, will enjoy coming to work. And they will be inspired to create something worthwhile for others.

VALUE IS ABOUT TRADITION. You can only be flexible in rising to the challenges of the future if you keep your feet firmly on the ground. If you are deeply rooted in your tradition. That also means being aware of your own history. We can only know where we are headed if we know where we came from. The tradition of a family, a trade, a corpo-rate policy creates a sense of trust. It outlives passing trends. It is more influential than any fad.

VALUE IS ABOUT RESPONSIBILITY. If you act responsibly, you can always explain why you took course of action “A” as opposed to course of action “B”. Responsibility starts with how you treat yourself, and then spills over into your relationships with the outside world. If we are prepared to take responsibility for the consequences of our decisions, then we can contribute to the future of our society. There is no question that this is a very valuable thing indeed.

VALUE IS ABOUT BEING AUTHENTIC. A company’s identity is as important as an individual’s identity. You have to be able to distin-guish it as something “real” as opposed to something “fake”. Authen-ticity shines through in a company’s products, brand and vision. An authentic drive to create value is not something that can be imitated. It is the seal of quality for every effort to strike a balance between economics and ethics.

From product quality, to service, to the company’s identity: Anyone who wants to create real value has to invest blood, sweat and tears – and never lose sight of the customer in the process.

8

THE VALUE OF A SCREW

DIVERSITYFrom the tiniest little screws in a clock mechanism, to the standard screws you can find in your tool box, to the meter-long steel screws that hold bridges and buildings together – you can find screws in a great variety of objects that shape our day-to-day lives. Germany’s railway network alone contains more than one billion screws.

IDEAThe main thing that distinguishes a screw from a nail, bolt or rivet is its thread. The principle is as convincing as it is straightforward: creating a detachable connection. Screws have been around for centuries and can be used by everyone.

CONNECTIONThe value of a screw lies in its function: It connects components to create new objects. This is what Aristotle would call its “ergon”, its specific purpose. Just as a knife’s purpose is to cut, as the ancient Greek philosopher once pointed out, a screw is deemed to do a good job if it can be screwed well. It only develops its potential when it is used.

A screw, Würth’s very first product, is an object that only appears banal at first glance. But its value is not just about the material itself, but rather about the ways in which the screw can be used. Why the screw is worth more than you might think:

9

INNOVATIONA screw is a winding, sloping surface, a principle that people were familiar with even in ancient times. Archimedes’ water screw, for example, allowed water to be transported uphill and represented a breakthrough in irrigation tech-nology. Whether it is a normal screw used to help fasten things together, a ship’s propeller or a screw cap – screw mechanisms are closely linked to progress and innovative spirit. But screws themselves have constantly evolved too. Würth’s patented ASSY® screw stands for maxi-mum functionality and intelligent design. It shows that even a product that appears to be simple, like a screw, can still be made even better.

FLEXIBILITYAs valuable as a strong connection is, flexi-bility is just as important nowadays! Whereas riveted or nailed connections can only be broken by force, screws can be unscrewed again and nuts can be loosened. This means that screws help to reconcile two contradic-tory aspects of modern life: the need for fixed structures and the wish to have all the freedom in the world.

USEFULNESSA screw is a means to an end, a problem solver. We do not keep screws in our homes just for the sake of it, but because of the things they can be used for. They are not a fun product, although it can, of course, be fun to use them in a car or in other handicraft work. In turn, however, this means that we always come back to the screw when we really need it. At the very latest when we can stand back and take a look at the shelves we have mounted on the wall, the value of the screw becomes as clear as day – and it does not even require you to say thank you.

DURABILITYWürth and its global success do right by the screw. A good screw is durable and lasts years. And despite all of the advances made and the massive range of different screws available today, the basic principle of the screw remains the same. This loyalty to tradition is what makes Würth so unique.

10

E very company has its own story to tell. It starts with a spe-cific business idea, with specific individuals in a specific place. In the beginning, the company is shaped by the personalities of its founders. Later on, new employees join the ranks, the organization grows and colleagues can look

back on shared experiences. This eventually gives rise to a corpo-rate culture that is characterized by certain modes of behavior, rules and rituals that are handed down from generation to generation – a culture of shared values.

Tradition provides a sense of stability and security. People know their roots. They feel they belong. They share certain values. A company’s tradition forges a sense of identity and trust. But a balance also has to be struck between tradition on the one hand, and change pro-cesses, changing values, innovation and globalization on the other hand. Nowadays, competitive companies need to be capable of achieving dynamic growth and constantly reinventing themselves. Those that stand still cannot survive. Globalization is changing corpo-rate identities and cultures. The pressure to be innovative is forcing companies to break with habits they have become fond of, e.g. as a result of digital technologies. The change in values within our society is transforming the working world: Conventional “9 to 5” jobs are a thing of the past. All of these developments are calling established traditions into question. Companies can only survive if they can react to these changes without giving up their culture and identity entirely. The company’s values play a key role in this process. After all, com-panies are more than just a collection of people and products. Peo-ple and products can be replaced. But without a common culture and shared values, a company cannot survive.

Values such as quality, reliability and customer orientation are all the more important when a company is faced with intense competitive pressure. Trust and integrity can help a company to overcome crisis situations. And a sense of identification with a particular region can help it to cope better with the demands of globalization.

The challenge facing each and every company is to constantly call into question its own traditions – i.e. all of the modes of behavior, rules and rituals that have been passed on through the generations: What parts of our tradition are really worth keeping? And is there anything that we are only doing in a certain way because that’s the way we have always done it? What are the unshakable values that make a company strong and characterize its sense of identity? And where might bad habits have crept in over the years that we can no longer afford in the new environment?

CHANGING VALUESWhy companies have to venture into the new to preserve the old

11

In an economic environment, tradition is not simply an end in itself. And we have to make sure that it does not lead us down the path of inertia and conservatism. The fact that “we have always done it that way” is not justification enough for “continuing to do it that way”. If we were to apply this sort of thinking to outdated manufacturing procedures, for example, the outcome would be fatal. Similarly, it would be equally silly to reject modern means of communication citing “tradition”. Tradition is not something you should hold onto simply because it is a tradition, but because it has something that has proven successful – and because there are good reasons to suggest that it will be successful in the future, too. One company, for example, could have a rule that employees have to turn up at meetings exactly seven minutes before they start. Obviously, there would not be the slightest reason to continue to apply the rule quite this strictly. The company could, however, continue to attach considerable importance to its employees’ punctuality because this value has proven its worth in day-to-day corporate life.

Even traditional values in a company cannot be taboos. They can change if the people themselves change, or if the circumstances change. Corporate cultures change as new, younger employees with new values join the company. The management has to remain open

to this sort of change and constantly ask itself whether the company’s traditional values are still consistent with the company’s reality. It is not enough to simply announce what a company’s values are. Values have to be put into practice in day-to-day working life – otherwise, they are dead. And they have to make sense in practice, too. Otherwise, they will become empty slogans reserved for staff meetings. Employees and customers have to be able to experience the company’s values day in, day out – and have to be able to see what the “value” behind these values is. This means that values have to be something that you can live. “Trust” requires an atmosphere based on trust, “quality” requires a suitable working environment and “passion” requires exciting challenges. Values do not simply fall from the sky and cannot simply be imposed from the top. Rather, they emerge from social interaction and communication – for example in places where people work together, experience things together, where old meets new.

So a company’s values should also include the willingness to question those very values. An open mind, the ability to accept criticism and innovative spirit should be the key values that guide any modern com-pany. It does not matter how valuable tradition is: You have to venture into the new to preserve the old.

VALUES HAVE TO BE PUT INTO PRACTICE – OTHERWISE,

THEY ARE DEAD

TRADITION IS NOT SIMPLY AN END IN ITSELF

12

1 What makes you like someone right away?

2 And what would tend to put you off?

3 What particular skills would you say an entrepreneur has to develop?

4 Which adjective describes you best?

5 What sort of person is a typical Würth employee?

6 Which strengths would you say Würth has as a company that might not stand out at first glance?

7 What are you scared of?

8 What do you pray for?

9 What is your personal motto for 2016?

10 What word really irks you?

11 When would telling a lie be justified?

12 What did you recently do for the very first time?

13 If you could do something completely outrageous, what would it be?

14 What would you say makes life worth living?

15 What would make you get out of bed at 4 a.m.?

16 What is the biggest challenge facing our society?

“A WORD WITH REINHOLD WÜRTH”We used an interview as an opportunity to ask Prof. Dr. h. c. mult. Reinhold Würth the following questions. You can start by thinking about what your own answers would be.

To find out what Reinhold Würth’s answers were, look at the illustration on the next page.

14

VALUE WITH A SENSE OF PROPORTION

hat do you do nowadays if you are not an IT native, but merely an IT immigrant? Just look up

the word “value” online and there you have it: a list of 346 character traits that can be summa-

rized under the term “value” and that describe how we live our lives, and our relationships with acquaintances, friends, business partners or our family. Let me pick out just a few of these traits: attentiveness, acceptance, adaptability, decency, sincerity, endurance, control, modesty, insight, humility, success, flexibility, freedom, composure, persistence, integrity, camaraderie, passion, performance, loyalty, motivation, openness, originality, precision, professionalism, self-confidence, solidarity, ambition, enjoyment, understanding, trust, growth, warmth, dignity, reliability and many more could have easily been taken from Würth’s value scale (list taken from the German source http://stevepavlina.de/werte-liste). These ethical values can be attributed to a company’s culture, but cannot be imposed and forced upon the company and its employees artificially in the form of official requirements set out in a sort of com-pany manual.

We all know, for example, that modesty, friendliness and humility are character traits that people should, ideally, have learned from their parents and that can only become a firm part of, and develop within, a corporate culture over decades if all of the individuals involved reach a certain basic philanthropic consensus that they apply to everyday working life and if they are prepared to recognize and accept Raiffeisen’s basic cooperative principle of “one for all and all for one” in everything that they do.

In 2015, I found myself in my 66th year with the company, having worked for Würth without any interruptions since 1949. Back then, I was able to observe the corporate culture initiated by my father Adolf – a corporate culture that I truly soaked up and have enhanced and continued to apply throughout my entire career. To me, my father Adolf, who established Würth in 1945 and managed it until he passed away in 1954, was the very embodiment of a virtuous, hard-working, honorable businessman who treated his employees very well and showed me, through his own example, both in our life as a family, later on while I was an intern within the company from 1949 to 1952 and for the two years after that, what the concept of culture and integrity really meant.

Looking at my company, I think I can summarize things rather well if I say that more than half of our success was not actually achieved because of products, systems, quality or prices, i.e. things that can

be described as managerial acts, but rather because of our manage-ment culture, style and remarkably above-average continuity: Within the ranks of our top management, virtually the only reason for staff turnover throughout the decades has been the fact that our managers have become old enough to retire. Other than that, there has been virtually no other reason driving a top manager to leave the company. The positive spirit of collaboration within the company can also be measured using other indicators. The average number of work days lost due to illness at the parent company, for example, comes to 5.2 percent (2015), and the staff turnover rate is 2.5 percent among our in-house staff and 6.2 percent among our sales force. I am extremely thankful for this exceptional level of stability. But we are trying to put our corporate values into practice using other channels, too. We are committed to keeping in touch with our employees even after the end of their active working lives, an initiative that encompasses both our former top managers and each and every other employee.

15 years ago, for example, I set up something known as the Würthary Club which retired managers can join. The aim is to ensure that we do not lose contact with our former top managers. We maintain our rela-tionship by organizing 2 two to three-day trips a year. One of the trips is one that only we men attend, while the other involves our wives as well. We obviously try to seek out a few nice destinations, such as Barcelona, Vienna, Rome, Paris, Istanbul, St. Petersburg, Venice, Prague, Oslo, Budapest, La Rioja, Bilbao, to name but a few.

This allows us to maintain close ties between former top managers and the company. Friendships between colleagues can be maintained and we also have an opportunity to present the latest developments from within the company. This Würthary Club is certainly a tool that nods to the Würth Group’s idealistic values. Today’s active managers obvi-ously find out about these events and trips and know that, when they retire later on, they can maintain their relationship with the company – a stability factor that is not to be underestimated.

It is obviously also very important to show all other retiring employees that the company will definitely not forget the hard work they have put in over the decades. We have set up the “Würth Institute for Social Affairs”, which is available to our retired Würth Group employees free of charge and helps them to organize visits to the authorities, to find lawyers who can deal with all kinds of transactions, e.g. drawing up a will, arranging medical care, etc. The Institute for Social Affairs also offers excursions for several hundred retired employees, as well as short trips within Europe which are mostly funded by the retirees themselves. This allows former employees to keep in touch with Würth until the end of their lives.

W

15

But of course, the company does not just consist of intangible, ide-alistic values, but also has to administer tangible and palpable things of value, things that increase in value and are measured in euros and dollars, renminbi and yen. Ever since my youth, I have always kept what is doubtlessly the most important sentence of my career in mind: GROWTH WITHOUT PROFIT IS FATAL! It has only been possible to build the Würth Group we know today – a Group with sales of more than EUR 11 billion (2015) and equity of more than EUR 4 billion (December 31, 2015) – practically from nothing because I have never lost sight of this correlation between growth and profit. This has allowed us to maintain an A rating from the top rating agency Standard & Poor’s – something which is rather unusual for a private, family-owned company – for 20 years now.

This means that our financial values are on a par with our ethical and social ones. The most fantastic corporate culture and the very best cooperation within the company are of no use whatso-ever if they do not have a solid financial foundation to build on. 2015 was anything but an exemplary year in this respect: Despite upping our sales by around EUR 1 billion, we failed to achieve any increase in profit to speak of. The additional gross profit of around EUR 400 million was eaten away by the costs of the orga-nization, meaning that we took a dangerous step towards “growth without profit is fatal”. The management is more than aware of this flaw in the otherwise pristine image of the Würth Group and has announced that it aims to achieve an above-average increase in our operating result in 2016 – and I am very confident that we will be able to achieve this. Every now and then, members of the public are keen to criticize the fact that Würth is getting bigger and bigger and to point out that surely the company’s current size is enough. I would like to silence the critics by reminding them that growth is obviously one of the fundamental values of the Würth Group – and not as an end in itself: In 2015 alone, we created more than 2,900 new jobs within the Group. Thus, we made contributions to the stability of the various countries in which we operate, albeit small ones – but do not forget that the oceans also consist of individual drops of water!

This means that the expansion of the company is also our way of living up to our socio-political responsibility, namely the responsi-bility to create new jobs and secure existing ones, with our work-force of 69,000 employees, i.e. to secure the livelihoods of around 210,000 people – counting our employees’ relatives – and to continue to strive to achieve this in the future, too.

Prof. Dr. h. c. mult. Reinhold Würth,Chairman of the Supervisory Board of the Würth Group’s Family Trusts,Honorary Chairman of the Advisory Board of the Würth Group

So we do not just understand “values” as referring to buzzwords like sustainability, environmental protection, securing resources in the future, etc. We also have to maintain a sense of proportion if we do not want to hit a dead end. If the sudden discovery of a nest of crested larks can delay the construction of a highway or a large housing estate by a number of months, then this is definitely the wrong approach – one that pays more attention to the sensitivities of fanatical environ-mentalists than it does to the aim of securing a habitable world in the long run.

Understanding and preserving values has to be based on a funda-mental sense of judgment and proportion if we want to be able to maintain a social market economy – which is certainly not the same thing as a socialist market economy – for the benefit of all of our citizens and, most importantly, all of our employees.

Reinhold Würth

16

COMMITMENT BULLETIN THE BOARDS GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS

A PERSON IS DEFINED BY MORE THAN JUST HIS WORK. THE SAME APPLIES TO A COMPANY. A COMPANY HAS A WIDE RANGE OF INTERESTS – AND A SOCIAL RESPONSIBILITY. WÜRTH IS COMMITTED TO SOCIETY, EDUCATION, ART AND CULTURE. OUR COMPANY SUPPORTS PROJECTS THAT PROMOTE THE INTEGRATION OF THE DISABLED, SUPPORTS MUSICIANS AND ATHLETES, COOPERATES CLOSELY WITH SCHOOLS AND UNIVERSITIES, AND GIVES WORKS OF ART A HOME IN ITS OWN COLLECTION.

17

WÜRTH IS COMMITTED TO

ART

EDUCATION

SOCIETY

18


EXPERIENCING ART AND CULTURE

The Würth Collection in Berlin Featuring more than 17,000 works of art, the Würth Collection is one of the biggest private collections in Europe. It includes works by the most eminent artists from the early mod-ernist period, as well as medieval masterpieces and classic pieces of con-temporary art. The collection was presented to the public in a scope that had never been seen before, with 460 internationally renowned works of art being displayed in an exhibition space spread across 27 rooms of the Berlin-based Martin-Gropius-Bau. The exhibition, which opened in Sep-tember 2015, was entitled: “From Hockney to Holbein. The Würth Col-lection in Berlin”. Reflecting the history of the Würth Collection, the exhibi-tion delves from the present back into the history of art: Among the works on display were David Hockney’s season cycle, a collection of sculptures by artists from Eduardo Chillida to Henry Moore, masterpieces of clas-sical modernism by artists such as Pablo Picasso and Edvard Munch, breathtaking works of decorative art, and a selection of the Würth Col-lection’s Old Masters, including one of the most significant paintings of the 16th century, Hans Holbein the Younger’s “The Madonna With the Family of Mayor Meyer”. A further highlight is the 25-piece monumental installation “The Last Judgement Sculpture” by Anthony Caro. The exhibi-tion provided collector Reinhold Würth with the opportunity to continue to pursue his contribution to the art scene in the German capital, which started back in 2006 with the establishment of a Chamber of Art within the Bode Museum. The exhibition was opened by the Federal Govern-ment Commissioner for Culture and the Media, Monika Grütters.

Kunsthalle Würth, Schwäbisch Hall The Nationalgalerie of the Staatliche Museen zu Berlin sent around 200 of its most famous works from the dramatic 1900 to 1945 era on tour. This made Schwäbisch

Hall the venue for a world-class exhibition, as the Nationalgalerie’s collection is renowned across the globe as one of the finest collections of early modernist work. Although the Nazi period left gaps in the National Gallery’s collection that cannot be filled, the German collec-tion nevertheless features a true wealth and abundance of high-quality art from the early modernist period: from Max Beckmann and Rudolf Belling to Lovis Corinth, Emil Nolde and Ernst Ludwig Kirchner, George Grosz or Otto Dix. Just like the interlocking cogwheels in Charlie Chaplin’s film, Modern Times, which is where the exhibition got its name from, the exhibition looks at different artists, themes, contemporary history and eras in relation to one another. In addition to aesthetic plea-sure of the highest order, the exhibition also provided an opportunity for lively discussions on history, art and politics.

Kunstkammer Würth London’s renowned Victoria and Albert Museum, the oldest and largest museum of design and applied arts in the world, presented a selection of its famous silver collection, includ-ing masterpieces from the superb Rosalinde and Arthur Gilbert Collec-tion, as a guest of the Kunsthalle Würth. Masterpieces from the British National Collection of Silver were united with high-quality objects from the Würth Collection Chamber of Art. One of the most remarkable pieces of its kind, which has special links to the region, is the Würth Collection’s allegorically sophisticated “Arch-Cupbearer’s Cup”. The Cup featured in the ceremony crowning Maximilian II from the House of Habsburg as Holy Roman Emperor in Frankfurt in 1562. At the same time, the “Op Art – Kinetics – Light. The Würth Collection from Josef Albers to Vasarely to Patrick Hughes” exhibition showed works from the Würth Collection.

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WÜRTH COLLECTION A spectacular presentation of the works from the Würth Collection in Berlin: The atrium of the Martin-Gropius-Bau formed the key element of the exhibition entitled “From Hockney to Holbein. The Würth Collection in Berlin”.

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Johanniterkirche, Schwäbisch Hall The Johanniterkirche church, whose permanent exhibition was presented in new contexts thanks to loans and counter-loans from and to Vienna, Zurich, Stuttgart, Tübingen and Cologne, was a hub of activity. Stained glass paintings alternated with carved altars and graphic art. Precious pages from Albrecht Dürer’s “Large Passion”, panel paintings by Hans Fries, sculptures by Mauch and Riemenschneider and rarely exhibited early modern printed graphic works from the Graphics Collection of the University Tübingen depicting “Women in the Old Testament” pro-vide an interesting diversion for visitors looking to pass the time until the return of “Darmstadt Madonna” by Hans Holbein the Younger, which formed the highlight of the collection’s exhibition in Berlin’s Martin-Gropius-Bau.

Museum Würth, Künzelsau In 2014, a calendar depicting photos from Burundi replaced the Würth Group’s traditional art calendar. The New York-based photographer Stephan Würth took photos of a community and hospice in Burundi to feature in the calendar. A small exhibition of his photos in the museum’s gallery was supplemented by a retrospective entitled “Rudolf Hausner – I am It”, which was

Robert Jacobsen Prize The “Focus on Sculpture” exhibition at the Museum Würth brought together for the very first time works by all the artists who have won the Würth Foundation’s Robert Jacobsen Prize. The result was a multifaceted show of works of contemporary art rep-resenting different international character and providing an impression of the concept of sculpture over the past decades. The works by Lun Tuchnowski, Richard Deacon, Magdalena Jetelová, Gereon Lepper, Stephan Kern, Rui Chafes, Bernar Venet, Monika Sosnowska, Alicja Kwade, Jeppe Hein and the 2015 prizewinner Michael Sailstorfer embody a strikingly distinctive approach. They were presented in the exhibition by means of characteristic works from the holdings of the Würth Collection, as well as by several works on loan. In this specially created context, the sculptural works entered into exciting discourses, both with each other and with Robert Jacobsen’s installa-tion in the forecourt of the museum, the largest realized by the artist during his lifetime.

The Robert Jacobsen Prize is worth EUR 25,000 and is awarded every two years in memory of the Danish sculptor to a sculptor from the “middle generation”.

ROBERT JACOBSEN PRIZE Sculptures by Michael Sailstorfer, the current winner of the Robert Jacobsen Prize, embel-lished the forecourt of Museum Würth in Künzelsau.

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CARMEN WÜRTH FORUM The ceremony marking the opening of the convention center will be held on July 18, 2017. This date also marks the 80th birthday of Carmen Würth, after whom the Forum is named.

presented to mark the 100th birthday of the Viennese visionary and featured works from the Würth Collection, as well as numerous loans. The photographs shown as part of “From Alaska to Syria. Reinhold Würth’s travel photographs” formed an exhibition within the exhibition.

Finally, the Museum for Screws and Threads, which is connected to the Museum Würth, was given a facelift. An association was also set up under the name “Verein Freunde der Museen Würth und Künstlerfamilie Sommer e. V.” to support the exhibition activities of the Würth Collection.

Carmen Würth Forum The new convention center will provide a meeting place for employees of the Group, as well as for the region as a whole. Construction work on the Carmen Würth Forum started with a groundbreaking ceremony at the beginning of December 2015 opposite the company premises in Künzelsau-Gaisbach. The Forum has been named after Carmen Würth, Professor Reinhold Würth’s wife. Nobody could do a better job than Carmen Würth has done in highlighting how important it is to create space for dialogue, enthusi-asm and enjoyment.

The Forum covers a total area of 11,000 square meters: an event center designed to seat 2,500 people and a chamber concert hall with space for 500 people. The foyer and gallery also provide space for a total of more than 500 visitors. The area in front of the main entrance will serve as a forum for open-air events, such as the Würth Open Air. In addition to company and cultural events organized by Würth, com-panies and sports clubs will also be given the opportunity to rent the Forum for their own events.

The Carmen Würth Forum was designed by David Chipperfield Architects, Berlin. In addition to Museum Folkwang in Essen, the firm had already planned Berlin’s Neue Museum (“New Museum”) and the Museum of Modern Literature in Marbach.

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SHARING COMMITMENT

The Würth Foundation also supports the Freie Schule Anne-Sophie schools in Künzelsau and Berlin and the Competence Center for Economic Education. Moreover, it administers the foundation for the promotion of the Reinhold Würth University of Heilbronn University in Künzelsau.

Würth Prize for Literature The Würth Prize for Literature has been awarded in cooperation with the University of Tübingen since 1996. The 2015 prize went to Katharina Hartwell and Doris Anna Schilz. The prize is worth a total of EUR 7,500. 250 authors applied for the 26th Würth Prize for Literature, the motto of which was “In der Fremde zu Hause” (At home in a foreign country). The prize went to works of prose of around 10,000 characters that convincingly use language in a novel way. The topic had been chosen by the two authors Chika Unigwe and Priya Basil during the Tübingen poetry professorship (Tübinger Poetik-Dozentur) at the University of Tübingen in 2014.

Freie Schule Anne-Sophie The independent Freie Schule Anne- Sophie school was opened in 2006 in Künzelsau on the initiative of Bettina Würth. The private school is owned and funded by the Würth Foundation. 2011 marked the opening of the bilingual sister school in Berlin, which obtained state accreditation for German high school levels I and II in 2015. Around 600 pupils attend Freie Schule Anne-Sophie in Künzelsau, with more than 200 pupils attending the Berlin-based school. Both schools are based on a unique educational concept: target and performance-oriented learning in a stimulating environment. Bettina Würth summarizes the concept behind the schools as striving to ensure that “every child leaves Freie Schule Anne-Sophie as a winner”.

Würth Foundation Set up in 1987 by Reinhold and Carmen Würth, the Würth Foundation promotes projects in the fields of science and research, art and culture, and education. The Foundation currently has total capital of EUR 7.6 million. In addition to its own activities, the Foundation also supports third-party projects and initiatives – mainly in the Hohenlohe region where the Group has its headquarters.

Due to the current political situation, the Würth Foundation decided to place particular emphasis on helping refugees in 2015. Intercultural and language courses are an absolute must to ensure successful inte-gration. In order to achieve this, Würth joined forces with the Hohenlohe district authorities to make an integration center available on the prem-ises of Akademie Würth at the company’s headquarters in Künzelsau, also donating EUR 500,000. The center aims to teach asylum seekers and refugees German, as well as to help them to integrate into society and working life. The center is working closely with the region’s Dia-konie and Caritas organizations, the social service organizations of the Protestant and Catholic churches respectively, the German Red Cross and other voluntary organizations. Würth also made a building avail-able free of charge to the regional authorities in order to accommodate around 50 asylum seekers and refugees.

Other major projects that have received regular support in the past include the Hohenloher Kultursommer, as well as the international violin competition organized every other year by Kulturstiftung Hohenlohe (Hohenlohe Cultural Foundation), the Junge Oper Schloss Weikers heim and the work of the historical association for Württem-berg-Franconia.

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University promotion A separate foundation under the umbrella of the Würth Foundation has been dedicated to supporting Reinhold Würth University in Künzelsau since 2005. The University offers eleven hands-on courses of study leading to Bachelor’s and Master’s degrees in business and technology subjects. The Künzelsau cam-pus, which has more than 1,500 students, is one of three campuses

of Heilbronn University, the largest university of applied sciences in Baden-Württemberg with a total of more than 8,300 students. The Würth Group contributed an endowment of ten million euros to the foundation for the promotion of Reinhold Würth University. This support will help secure the Künzelsau university campus in the long run and forge ahead with its expansion.

FREIE SCHULE ANNE-SOPHIE Appreciation, mind-fulness, a willingness to learn and confidence are the order of the day at Freie Schule Anne-Sophie. These values are reflected in all areas of the school, including in art lessons, where pupils take a very close look at the “human image” to create characteristic sculptures.

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Carmen Würth Social commitment and the integration of people with physical and mental disabilities into society is a matter very close to Carmen Würth’s heart. She is particularly committed to promoting, educating and training the disabled in a wide range of projects and to breaking down barriers in their everyday life. With her caring manner, Carmen Würth gives people the courage to believe in themselves. There is something special about each and every individual. Carmen Würth provides them with the space they need to develop.

Anne-Sophie Hotel and Restaurant Carmen Würth opened the hotel in Künzelsau back in 2003 to create a place in which people with and without disabilities can come to meet and communicate. The institution aims to make it easier for these employees to participate in social life and to earn a living. Anne-Sophie Hotel and Restaurant is particularly proud of its restaurant handi ap, which opened in 2013. In 2014, the kitchen and service team led by top chef Serkan Güzel-coban was awarded a Michelin star in recognition of its excellent spirit of collaboration and unique cuisine. The hotel currently employs a workforce of 80, around one quarter of whom have disabilities.

Warsteiner Prize In the spring of 2015, Carmen Würth was awarded the Warsteiner Prize for her lifelong exceptional commit-ment to improving the lives of the disabled. The prize is awarded every year, within the context of the German Catering Industry Prize (Deutscher Gastronomiepreis), to members of the catering industry who show a special, exceptional commitment to the industry. All members of the jury agreed: “Carmen Würth has shown a tireless commitment to bringing people with and without disabilities together for more than ten years now. She further developed her vision to come up with an exemplary, creative overall concept that sets new standards for the catering industry to meet in the long term.”

Special Olympics Deutschland On Carmen Würth’s initiative, Würth has also been supporting the German organization of the world’s largest sporting movement for people with mental and multiple disabilities, which is recognized by the International Olympic Com-mittee (IOC), since 2008. Fifty volunteers from Würth took part in the Special Olympics National Winter Games in Inzell in 2015.

ANNE-SOPHIE HOTEL AND RESTAURANT People with and without disabilities work together hand in hand in the hotel. The disabled employees are trained and guided by specialists to work in house-keeping, building services, the kitchen or as members of the service team.

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Music festival “With one another – for one another. Live with heart” was the motto of the second music festival for people with disabilities. The event in Künzelsau welcomed more than a dozen music groups from the Hohenlohe region featuring people with disabilities. The groups, which represent a range of different institutions, facilities and workshops, presented a varied program of rock, pop, jazz and carni-val marching music to the audience. As the project’s initiator, Carmen Würth wants more emphasis to be placed on musical education for people with disabilities.

In addition to the music festival, a symposium entitled “Musical edu-cation for the disabled – an insight into research and practical work” was held in November. Experts from academic and educational circles gave presentations on possible concepts for musical education for the disabled and presented their latest research results. The sym-posium is aimed primarily at musical societies and music teachers in order to raise awareness for music making with people with disabili-ties and eliminate any fears.

Refugee choir Together with the district authorities of Hohenlohe, the Würth Foundation is supporting the “Badinya-Familie” music group, which is made up of refugees living in Künzelsau and Öhringen. An average of 20 young men from Afghanistan, Syria, Kurdistan, Gambia, Eritrea, Iran and Iraq meet up once a week to make music together. Outings to cultural events are also on offer. Carmen Würth initiated the project together with Tobias Frank, a trained opera singer who is the group’s musical director. The group performs German pop and folk songs that are interpreted using sounds from the men’s native countries to give them a unique edge.

The group has performed at a number of events including “Interkulturelle Woche Öhringen” (Öhringen’s Intercultural Week), “Internationales Sommerfest Würth” (Würth’s Internatio nal Summer Party) and the “Ideenwerkstatt“ (Workshop of Ideas) for the “Hohen loher Integra-tionsbündnis 2025” (2025 Hohenlohe integration alliance). The group recorded a song entitled “Wir sind von überall” (We are from everywhere) for the CD “So bunt klingt’s am Limes” (The diverse voices from the Limes), which appeared in connection with the 2016 state horticultural show in Öhringen. The musical activities focus on cultural exchange, as well as on teaching language and culture.

MUSIC FESTIVAL Carmen Würth, the mind behind the event, with the “Wild Chicken” group from Jagsttalschule school in Westhausen, enjoying the music festival for the disabled in Künzelsau.

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Competence Center for Economic Education The aim of the Competence Center is to promote economic issues in schools and spark an interest in economic processes and entrepreneurial spirit among school children and teachers alike. The Competence Center cooperates closely with the Ministry of Education and Cultural Affairs, Youth and Sports of Baden-Württemberg to develop concepts to help schools raise these issues. One example of this commitment is the annual Würth Education Prize.

The Würth Education Prize helps schools providing general education in Baden-Württemberg to implement forward-looking economics projects. The participating schools are then provided with financial and personnel support for their projects during the next school year. Total prize money of EUR 12,000 is awarded to six schools. In 2015, the Gustav-Schönleber-Schule school from Bietigheim-Bissingen was awarded the first prize, worth EUR 4,000. Children at the school set up a bicycle repair shop for repairs, maintenance and servicing. The project focused on hands-on work experience and on promoting a sense of responsibility.

In addition to the Würth Education Prize, the main activities of the Competence Center for Economic Education include an annual Management Symposium that addresses interesting topical issues from the worlds of school and business, as well as the “Werkreal-schulpreis” (Secondary Technical School Prize), a prize awarded at the state level for outstanding achievements.

Lifelong learning Training and further education has been a top priority within the Würth Group for more than 30 years now. Würth offers commercial, logistical and technical apprenticeships, as well as Bachelor’s degree courses in these areas in collaboration with Baden- Württemberg Cooperative State University. It also offers a large number of other apprenticeships combining work and study within its German group companies.

Adolf Würth GmbH & Co. KG set up Akademie Würth back in 1991. An extensive range of courses allows employees to put together their own further education program.

Akademie Würth Business School offers Würth Group employees and interested external parties academic training programs for working professionals. In collaboration with the Distance Learning University in Hamburg, even students without university entry qualifications can work towards their Bachelor of Arts. The Business School also offers Master of Business Administration (MBA) courses in cooperation with the University of Louisville (UofL) in Kentucky, USA at the UofL College of Business, which is accredited by the AACSB (Association to Advance Collegiate Schools of Business) and consistently receives high scores in the rankings.

SHAPING EDUCATION

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10TH ANNIVERSARY OF THE COMPETENCE CENTER FOR ECONOMIC EDUCATION The Competence Center for Economic Education in Baden-Württemberg presented the Würth Education Prize at the celebration to mark its 10th anniversary in November 2015. The Competence Center is an initiative of entrepreneur Professor Dr. h. c. mult. Reinhold Würth, which was called into being under the umbrella of the Würth Foundation in 2005.

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Treffpunkt Forum The former German Chancellor Gerhard Schröder opened a new series of events entitled “Treffpunkt Forum” (Meetings at the Forum) at Akademie Würth in 2015. He spoke about “The out-look for German and European politics” in front of an audience of around 550 invited guests.

The politician from Germany’s Social Democratic Party talked about his view of the possible outlook, opportunities and risks for Germany and Europe. He placed particular emphasis on refugee policies and called for a greater sense of collaboration and cohesion, as well as for more dialogue. In a discussion round, he answered questions posed by moderator Bernadette Schoog on the refugee crisis and the grow-ing disagreements between Russia and Germany.

“Treffpunkt Forum” is a series of events for employees of the company and for members of the general public, and offers an opportunity for

dialogue with prominent guests from the fields of business, politics and society. Current issues are tackled in presentations, discussion rounds and podium discussions.

Representative offices In Berlin since 2003 and in Brussels since 2005. Würth attaches a great deal of importance to critical dialogue with social groups and institutions. Würth Haus Berlin and Würth Office Brussels have established themselves as key dialogue forums for German and international politics. They focus, in particular, on matters related to business foreign trade policy as part of the EU’s trade regula-tion. Listening and understanding, but also articulating and comment-ing – this is how Würth believes debate should take place with business and industry, at discussion rounds, conferences and receptions. Both representative offices also offer a platform for cultural events in order to transport our understanding of commitment in a hands-on manner. Our aim is to be open so that others can be open with us.

TREFFPUNKT FORUM Prof. Dr. h. c. mult. Reinhold Würth talks to moderator Bernadette Schoog about art, travel, politics, his com-pany and life in general.

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TECHNOLOGY PARTNER IN FORMULA E Würth Elektronik eiSos, which develops and manu factures electronic and electro mechanical components, is acting as a techn ology partner for ABT Schaeffler Audi Sport in Formula E, an initiative which also serves as an advertising platform and an experience workshop for the eMobility market of the future at the same time.

Sport sponsoring “100% quality”. This was the simple yet clear message that Würth used to present itself at around 120 qualifying matches for the EURO 2016 soccer championships. The claim was translated into the national languages of the countries playing each other at each match. The advertisements also showed the website URL of the relevant national company, thus sending out a clear signal for the Würth Group’s e-business activities. This means that international soccer is and remains the Würth Group’s biggest sponsoring focal point, one which benefits all Würth companies in Europe and across the globe. In addition to the advertising activities in Spain (referee advertising) and Germany (featuring various Bundesliga players), in 2015 Würth once again presented itself as a strong brand in what is by far the general public’s favorite sport.

In addition to soccer, winter sports were the second key pillar of Würth’s sponsoring strategy in 2015. As a premium sponsor of the German Ski Association, Würth could be seen on television during more than 2,500 hours of world cup coverage during the last season. In Germany, for example, on 60 days of live coverage, around 39

hours focused exclusively on the Würth logo, allowing the company to reach out to more than 240 million people. Then, there is the compa-ny’s strong presence in print and online media, allowing Würth to draw considerable attention to the brand during winter.

Our brand presence in the field of motor sport is a multi-faceted one. In addition to Asia and South America, our successful commitment to the US NASCAR racing series forms the cornerstone of our activities.

The group companies also share in this commitment: Würth Elektronik eiSos extended its sponsoring contract with ABT Schaeffler Audi Sport for a period of three years in 2015. The upcoming season will already be characterized by the technology partnership now that participants are allowed to use their own developments for engines, gears and engine software in Formula E competitions. Use in racing cars is consid-ered the acid test for electronics systems. Würth Elektronik eiSos hopes that the commitment will provide it with valuable input for the develop-ment of electronic components in the fields of heat management and energy efficiency.

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Ladies and Gentlemen,

In June 2015, representatives from the world’s seven leading industrialized nations met at the G7 summit in Germany. The refugee crisis and the attacks in Paris really put the motto of the summit, “Think Ahead. Act Together”, to the test across Europe and worldwide at the end of the year. And the question we are asking ourselves is: How valid are our values?

Values like honesty, predictability and straightforwardness are deeply ingrained in Würth’s corporate culture. But what is a value? On the one hand, it is a figure, a definition: the value of a coin. We list values like these on our balance sheets. Our blood count values are defined by boundaries that classify them as good or bad. And what about moral values? They are not contained by any upper or lower limits. Values need something to be compared against. We measure them in terms of how they compare to the alternative. Our customers trust us to be honest. And while they cannot measure this honesty, they can certainly feel it. This gives honesty the value that it needs in order for any business relationship to survive. And so an ethical, moral value allows economic value to be created. As a family business, we place great value on raising awareness for this. Once we have achieved this, we can once again start thinking about tomorrow, together.

Work of the Advisory Board

In 2015, the Advisory Board of the Würth Group held four extensive meetings, with a joint strategy meeting of the Advisory Board and the Central Managing Board being held in July 2015. These meetings were based on the reports of the Central Managing Board members on the business situation, projections and opportunity and risk management. All transactions subject to approval pursuant to the company statutes were submitted to the Advisory Board for approval in good time and considered in detail; in urgent cases, resolutions were passed by circulars.

REPORT OF THE ADVISORY BOARD

Bettina Würth, Chairwoman of the Advisory Board of the Würth Group

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In 2015, the work of the Advisory Board was shaped to a considerable degree by the strategic developments within the Würth Group and by the provision of advice to the Central Managing Board on these strategic matters. As in previous year, one focal point was the further development of the conventional Würth business model in order to establish the company as a multi-channel sales company. The Advisory Board also focused on issues related to compliance, acquisitions and investments.

The Audit Committee and the Investment Committee both met three times in 2015, while the Personnel Committee met four times. The committees serve to increase the efficiency of the Advisory Board and carry out preparatory work on complex issues. The committee chairs each report regularly to the Advisory Board as a whole about the work of the committees.

On April 12, 2016, the Advisory Board’s Audit Committee took an in-depth look at the 2015 consolidated financial statements, including the Group management report, as well as the audit report prepared by Ernst & Young, in which an unqualified opinion was issued. The Audit Committee examined these documents and approved them. The Audit Committee’s work in 2015 also focused on risk management, the effectiveness of the internal audit function and the further development of compliance structures within the Würth Group.

The Advisory Board’s Investment Committee assessed the investment projects that are subject to approval and classified them according to urgency and significance. The Würth Group will remain true to its investment culture as a prerequisite for the com-pany’s growth, meaning that the investments approved for the 2016 fiscal year will be on a similar level to previous years, taking sales growth into account. The Advisory Board approved the investment and financial plan of the Würth Group for the 2016 fiscal year at its meeting on December 11, 2015 based on the proposal made by the Investment Committee.

The Advisory Board’s Personnel Committee dealt with all personnel measures falling within the Advisory Board’s area of responsibility at its meetings. The committee focused on HR development and succession planning, as well as on the structure of the company’s incentive and remuneration systems. Due to the new Group structure that was introduced in 2013 and given the further growth of the Würth Group, the Personnel Committee held an additional meeting to address the revision of the allocation of responsibility and decision-making powers within the Central Managing Board. The Personnel Committee has the power to pass resolutions regarding employment contracts and management remuneration.

The Advisory Board of the Würth Group would like to thank the Central Managing Board and the Supervisory Board of the Würth Group’s Family Trusts for the good working relationship, especially Prof. Dr. h. c. mult. Reinhold Würth, Chairman of the Supervisory Board of the Würth Group’s Family Trusts, who attended all meetings of the Advisory Board. We would also like to thank all employees for their strong commitment and their decisive action, as well as all our customers and business partners for their loyalty to the Würth Group.

Sincerely,

Bettina WürthChairwoman of the Advisory Board of the Würth Group

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REPORT OF THE CENTRAL MANAGING BOARD

Ladies and gentlemen,

What is its value to me? This is a question we probably ask ourselves intuitively and without noticing before we make any decision. We hold a silent discussion with ourselves about how much effort we want to put into achieving a particular goal. The value question is one we have to ask before each and every investment. All business management KPIs assess our “value” as entrepreneurs, managers, employees. It does not matter whether we are the ones passing value judgments or having value judgments passed on us. We decide how committed we are and we set the limits. The challenge lies in how systematic one is prepared to be.

Added value. E-business, digitalization, industry 4.0 – progress that allows more to be achieved in the same amount of time. In order to earn more and remain competitive. Here at Würth, we can see how much “more” we have achieved if we look at how we have developed as a multi-channel sales company. I have made a conscious decision to use the term

“developed” as opposed to “changed”. Achieving more in one area does not necessarily mean achieving less in another. More business in the online shop does not have to mean less business generated by the external sales force. More company acquisitions does not have to mean less organic growth at our established entities. We always experience and assess change in a very individual way. This is why, as we develop, we have to continue to focus on our customers and their individual wishes in their own work processes so that we are familiar with their preferences and do not make the mistake of underestimating their skepticism. In 2015, Würth hired another 1,000 sales representatives across the globe in addition to making large-scale investments in e-business. While we are well aware of the value of the future, we sell our products in the here and now.

Growing value. Internationalization is one of our success factors. What started back in 1962 with the first foreign com-pany in the Netherlands has now, 55 years down the line, turned into a group comprising over 400 companies in more than 80 countries across the globe. The decision to pursue this sort of geographical presence is a sustainable one: In 2015, we

Robert Friedmann, Chairman of the Central Managing Board of the Würth Group

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used three acquisitions to invest in one of our fastest-growing markets: the USA. The acquisition of 100 percent of the shares in Northern Safety Co., Inc. in Frankfort, New York, which specializes in the sale of industrial safety products, will increase the Group’s sales by around 180 million US dollars. This means that we are expanding business models that we are familiar with, in which we are experienced, in which we are already active and where we already know the market. This will allow us to further increase our market share, which is still under the five percent mark in global terms, in these markets. Diversification also provides considerable growth impetus: The Allied Companies now account for more than 40 percent of the Group’s total sales and have established themselves as a value-adding factor.

Countervalue. In 2015, the Würth Group generated sales of EUR 11 billion – up by 9.1 percent to mark a new record high. Our operating result is up slightly in a year-on-year comparison to EUR 525 million. An engine needs fuel to turn its energy into drive. Without fuel, it is worthless. It needs fuel to be able to show just how powerful it is. Our 69,000 employ-ees worldwide are the gasoline and oil driving value increases within the Würth Group: Their motivation and the things they make possible are our fuel. Their individual performance allows them to achieve the company’s objectives and create a bridge between their values and our corporate culture in day-to-day working life. Three million customers confirm that the values that guide us have the power to secure the future. The 200,000 new customers that we gained in 2015 prove that value and values are both important.

Valuable. We set our own high standards when it comes to striking a balance between ethical and financial values. We are promoting speed, and calling for progress and increasing levels of service in every corner of the globe, bridging cultures and uniting them. All developments come at a cost, meaning that we, as a company, have a responsibility. But responsibility only works on an equal footing between generations, genders and hierarchies. As a company, we have to continually man-age to bring people and markets, work and life together in a way that benefits everyone. Most importantly, however, we have to make sure that nobody feels worthless in this big picture. If we can achieve this, then it is not just diversity, but also development that has a chance.

The value of saying thanks. The Central Managing Board of the Würth Group would like to extend its thanks to all of its customers worldwide, to all employees, to the Council of Confidence and Works Councils in the Würth Group, to the members of the Advisory Board and the Supervisory Board of the Würth Group’s Family Trusts, to the Würth family and, most importantly, to Prof. Dr. h. c. mult. Reinhold Würth. Be it for their performance, loyalty, trust, constructive debate and open dialogue, advice or genuine hard work – all of these efforts have earned a big “thank you”!

The latest forecasts for the European economy are positive ones. Value, be it in a financial or ethical sense, relies on the people who create it and work towards it. Würth is also full of optimism and drive for the coming 2016 fiscal year. Hand in hand with our employees, we aim to create more value year in, year out.

For the Central Managing Board of the Würth Group

Robert FriedmannChairman of the Central Managing Boardof the Würth Group

34


ORGANIZATIONAL STRUCTURE

Advisory Board9 members

Central Managing Board4 members

Executive Board23 Executive Vice Presidents manage the strategic business units (functions, divisions, regions)

Managing Directors of over 400 separate entities

WÜRTH GROUP: LEGAL STRUCTURE (SIMPLIFIED CHART)

WÜRTH FAMILY TRUSTS

Adolf Würth GmbH & Co. KGGermany

Würth International AGSwitzerland

Würth Finance International B.V.Netherlands

Subsidiaries outside Germany



Reinhold Würth Holding GmbHGermanyGerman subsidiaries

Würth Promotion Ges.m.b.H.Austria

35

ADVISORY BOARD

Bettina WürthChairwoman of the Advisory Board of the Würth Group

Dr. Frank HeinrichtDeputy Chairman of the Advisory Board of the Würth GroupChairman of the Management Board of Schott AG, Mainz

Peter EdelmannManaging Partner of Edelmann & Company, Ulm

Dr. Ralph Heck(Member of the Advisory Board since January 1, 2016)Director of McKinsey & Company, Düsseldorf

Hartmut JennerChairman of the Executive Boardof Alfred Kärcher GmbH & Co. KG,Winnenden

Wolfgang KirschChief Executive Officer of DZ BANK AG, Frankfurt / Main

Jürg MichelFormer Member of the Central Managing Board of the Würth Group

Ina SchlieHead of Group Tax at SAP SE, Walldorf Member of the Supervisory Board and Chair of the Audit Committee at QSC AG, CologneMember of the Supervisory Board of Theo Müller S.e.c.s., Luxembourg

Dr. Martin H. SorgCertified Public Accountant and Partner of the Law firm Binz & Partner, Stuttgart

Honorary Chairman of the Advisory Board

Prof. Dr. h. c. mult. Reinhold WürthChairman of the Supervisory Board of the Würth Group’s Family Trusts

Honorary members of the Advisory Board

Rolf BauerFormer Member of the Central Managing Board of the Würth Group

Dr. Bernd ThiemannFormer Chairman of the Management Board of Deutsche Genossenschaftsbank AG, Frankfurt / Main

The Advisory Board is the supreme supervisory and controlling body of the Würth Group. It advises on strategy, approves corporate planning as well as the use of funds. It appoints the members of the Central Managing Board, the Executive Vice Presidents as well as the managing directors of the companies that generate the most sales.

(as of: January 1, 2016)

36


CENTRAL MANAGING BOARD

Peter Zürn (left), Robert Friedmann, Bernd Herrmann and Joachim Kaltmaier (right) in Schwäbisch Hall in front of Kunsthalle Würth, which was opened in 2001 based on designs developed by the Danish architect Henning Larsen. The facade was crafted using local shell limestone from Crailsheim.

37

The Central Managing Board is the highest decision-making board of the Würth Group. It has four members and is comparable to the management board of a group holding company. Its most important duties include corporate strategy planning, the selection of executives as well as the management of strategic business units and functions.

Robert FriedmannChairman of the Central Managing Board of the Würth Group

Peter ZürnDeputy Chairman of the Central Managing Board of the Würth Group

Joachim KaltmaierMember of the Central Managing Board of the Würth Group

Bernd HerrmannMember of the Central Managing Board of the Würth Group(since May 1, 2015)

Uwe HohlfeldMember of the Central Managing Board of the Würth Group(up until April 30, 2015)

38


CUSTOMER ADVISORY BOARD

The Customer Advisory Board brings together Würth customers from the worlds of trade and industry. The members report on developments in their sector and support Würth in aligning its activities with customer requirements. The board’s meetings, which are held twice a year, also look at new products and innovative services.

Roland SchulerMember of the Board of Management of BayWa AG, Munich

Burkhard WellerManaging Partner ofWellergruppe GmbH & Co. KG,Berlin

Frank WestermannManaging Director of Karl Wester-mann GmbH & Co. KG, DenkendorfChairman of the Technology Com-mittee of Landesverband Schreiner-handwerk, Baden-Württemberg

Rudolf F. WohlfarthMember of the Management of Emil Frey GroupChairman of the Management Board in Germany, Stuttgart

Honorary Chairman of the Customer Advisory Board

Gerhard Irmscher

Joachim WohlfeilChairman of the Customer Advisory BoardManaging Director of Ernst Wohlfeil GmbH, Sanitärtechnik, KarlsruhePresident of the Karlsruhe Chamber of Trade (Handwerkskammer)

Johannes MoserPartner of Beratungsgesellschaft Trendsconsulting, Stuttgart

Dr. Thomas PeukertManaging Director of Stahl CraneSystems GmbH, Künzelsau

39

GROUP MANAGEMENT REPORT OF THE WÜRTH GROUP

The Würth Group is the global market leader in the trade of fastening and assembly materials. The foundation stone was laid in 1945 by Adolf Würth, when he set up Adolf Würth GmbH & Co. KG, a simple company selling screws, the parent company of the Würth Group, in Künzelsau.

After his father’s early death in 1954, Reinhold Würth took over at the helm of the family business, which was generating annual sales of EUR 80,000, at the age of 19. In 2015, a good 60 years later, the Group is generating sales of EUR 11 billion and has a workforce of 69,000. The Group’s international focus started with the formation of the first foreign company in the Netherlands in 1962. Today, the Group has more than 400 companies and operates in more than 80 countries.

Two birthdays, one storyIn 2015, Prof. Dr. h. c. mult. Reinhold Würth celebrated his 80th birthday and Adolf Würth GmbH & Co. KG its 70th anniversary. An after-work party, the Würth Open Air and an open house served to ensure that people well beyond Hohenlohe’s borders were aware of the birthday year and that it was celebrated accordingly.

SALES DEVELOPMENT Würth Group in millions of EUR

3,000

6,000

9,000

12,000

The operational unitsThe Würth Group is split into two operational units: Würth Line and Allied Companies. The Würth Line companies are responsible for the Group’s conventional core business, the sale of assembly and fastening materials. Our high quality demands are applied to 125,000 products: screws, bolts, screw accessories, screw anchors, chemical products, furniture and building fittings, tools, storage and retrieval systems, and protection equipment for professional users. Allied Companies operate in related areas as sales or manufacturing companies, and also include financial services providers, hotels and catering businesses.

The distribution networkWith more than 420 branch offices, Adolf Würth GmbH & Co. KG is closer to its customers than any of its competitors. The Würth Group boasts 1,600 branch offices across the globe. A sales organization that includes 31,000 sales representatives worldwide guarantees the provision of professional advice to more than three million customers from trade and industry.

The Würth Group

0.08

CAGR: 21.4%(Compound Annual Growth Rate)

19951954 1960 1965 1970 1975 1980 1985 1990

11,047

5,136

1,234

282331.0

2000 2005 2010 2015

8,633

40


The euro area experienced continued economic recovery in 2015 and is moving further and further away from recession. Gross Domes-tic Product rose by 1.6 percent in a year-on-year comparison (2014: + 0.9 percent). The economic situation in Portugal bounced back further in 2015. Gross Domestic Product increased by 0.6 percentage points year-on-year to 1.5 percent (2014: + 0.9 percent). Spain is also continuing to shake off the shackles of the economic crisis, report-ing strong growth in Gross Domestic Product in 2015. The Spanish economy had already shown positive development back in 2014 (+ 1.4 percent) and in 2015, GDP increased further by 3.2 percent year-on-year. After falling for two years running (2013: –1.7 percent, 2014: – 0.4 percent), Italian Gross Domestic Product also achieved a turnaround in 2015. The Italian economy grew by 0.8 percent last year. In France, rising consumer spending pushed Gross Domestic Product up in the third quarter of 2015, also fueling an upswing in the French economy as a whole in 2015. GDP rose by 1.1 percent (2014: + 0.2 percent). Economic growth in the UK fell by 0.6 percentage points year-on-year to 2.3 percent in 2015 compared with growth of 2.9 percent in 2014. The economic situation in Russia deteriorated considerably in 2015. While Gross Domestic Product increased by 0.6 percent in 2014, the Russian economy contracted by 3.7 percent in 2015.

The harsh winter on the East Coast, the negative impact of strikes on trade on the West Coast and the droughts in California hindered a more pronounced upswing in the US economy in 2015. Gross Domestic Product only increased by 0.1 percentage points year-on-year to 2.5 percent (2014: + 2.4 percent). The Latin American economy continued to tail off in 2015. GDP fell by 0.6 percent (2014: + 1.3 per cent). Two markets that are of considerable strategic importance to the Würth Group, China and India, continued to show positive economic development in 2015, although the Chinese economy lost slight momentum in 2015 compared with 2014. Nevertheless, China reported GDP growth of 6.9 percent (2014: + 7.3 percent). In India, growth picked up again, rising from 7.1 percent in 2014 to 7.2 per-cent in 2015.

Economic environment

Global economic development in 2015 was marred by a slump in key emerging markets. Although the economic situation in the world’s industrialized nations remained largely stable, Russia and Brazil slipped into a recession in 2015 and China lost slight economic momentum. This means that the companies in the Würth Group were once again faced with an environment that was far from easy in 2015. All in all, economic growth increased by 3.0 percent in 2015, down by 0.3 per-centage points on 2014 (+ 3.3 percent).

• Slump in key emerging markets hinders economic upswing

• Consumption proves the main driving force behind the German economy

• Steady economic growth in Germany

The economic situation in Germany, the Würth Group’s largest single market, was characterized by solid growth in 2015. Gross Domestic Product increased by 1.7 percent year-on-year (2014: + 1.6 percent).

The trades segment, which is the most important sales market for the Würth Group, continued to show positive development. Sales in the trade businesses rose by 2.1 percent in 2015 (2014: + 2.4 percent). In the metal and electrical industry, another key sector for the Würth Group, production rose by only 0.6 percent (2014: + 2.7 per-cent). The German automotive industry reported slight growth in domestic production in 2015. The number of vehicles produced rose to 5.7 passenger cars, up by 1.9 percent on the previous year (2014: 5.6 million). The German mechanical engineering sector closed 2015 at a high level, but only reported slight growth to the tune of 1.0 percent (2014: + 0.7 percent). This development can be traced back to the numerous crises that put a damper on the order situation in Ger-many’s mechanical engineering sector. Developments in the con-struction sector were not quite as positive in 2015 as in the previous year. Sales growth dipped by 2.5 percentage points to 1.6 percent (2014: + 4.1 percent).

41

Business development

• Tailwind for sales thanks to exchange rate effects and acquisitions

• Operating result of EUR 525 million up slightly year-on-year

• 68,978 employees worldwide

In 2015, the Würth Group generated sales of EUR 11 billion, the highest figure in the company’s history (2014: EUR 10.1 billion). This represents an increase of 9.1 percent. This positive development is underlined by the fact that, in the months of September and October, the company reported two consecutive monthly sales records of more than EUR 1 billion in each case. In local currency terms, this translates into growth of 6.7 percent in 2015. It is particularly encouraging to see that all business units reported an increase in sales. Although the Electrical Wholesale unit and the Würth Line Industry Division bene-fited from company acquisitions, the sales increases of over 15 per-cent continue to be very positive. The Industry Division, for example, managed to surpass the EUR 1 billion sales threshold for the very first time. Company acquisitions allowed the Würth Group to grow by an extra 2.4 percentage points in total. Organic growth came in at

6.7 percent in 2015. Since most of the acquisitions were made abroad, the sales breakdown shifted in favor of the non-German subsidiaries of the Würth Group.

At EUR 525 million, the Würth Group’s operating result was slightly up on the prior year (2014: EUR 515 million). In addition to more than 1,000 new hires in the sales force, a weaker calculation and higher depreciation and amortization had an impact on the result in 2015.

Despite only a slight improvement in earnings, the Group made substantial investments in its various divisions, units and markets. At EUR 525 million, capital expenditures were up on the level seen in recent years and are the basis for the Würth Group’s future growth.

The number of employees rose once again, with a total of 68,978 people now working for the Würth Group (2014: 66,044). Including sales-related areas, more than 40,000 employees have direct contact with customers, with over 31,000 of them working as sales represen tatives. This means that the Würth Group remains the biggest employer of salaried sales specialists.

9,985 9,745 10,126

2006

7,748

2007

8,489

2008

8,816

2009

7,522

2010

8,633

2011

9,699

2012 2013 2014

SALESWürth Group in millions of EUR

3,000

6,000

9,000

12,00011,047

2015

42


Sales by region

• Germany remains most important single market• Developments in Southern Europe gain considerable

momentum• All regions grow in local currency terms

The positive sales trend was particularly evident in the regions of Southern Europe and North America, even though Germany remains the most important and largest single market of the Würth Group. All in all, the companies in Germany grew by 4.5 percent to EUR 4.8 billion. The companies outside of Germany reported more substantial growth of 12.9 percent, also boosted by acquisitions. Particularly in southern Europe, however, the crisis years would appear to have been consigned to the history books and we expect sales to rise again over the next few years. The economic situation has stabilized in Spain and Portugal, in particular.

One of the Würth Group’s strengths is decentralization. Thanks to the geographical diversification, our more than 400 companies in more than 80 countries allow us to participate in regional growth markets and to thus at least partly compensate for stagnation or sales declines in individual countries. Depending on the maturity of the individual markets, the strategic approaches to market penetration vary from region to region. In fledgling markets, the focus is on developing the sales force. The established entities concentrate on refining their sales divisions and expanding their sales channels, such as branch offices and e-business, through a regional approach, customer-specific seg-ments and a policy of seeking out potential.

Accounting for more than 40 percent of sales, Germany remains the most important market for the Würth Group. Germany is home to

the company that forms the core of the Group, Adolf Würth GmbH & Co. KG, which celebrated its 70th anniversary in 2015. Since it was established back in 1945, the biggest individual company in the Würth Group by far has been able to lift its sales to a record high of EUR 1.4 billion. 6,412 employees work as sales representatives and in-house staff, attending to our customers’ needs. With more than 420 branch offices, the Group’s flagship is closer to its customers than any of its competitors. It is not just in terms of sales that Adolf Würth GmbH & Co. KG boasts its pole position: it also set new standards in terms of oper-ating result last year, reporting a figure in excess of EUR 100 million. In addition to the parent company, there are other companies in Germany that make a key contribution to the earnings power of this region and have been characterized by high levels of profitability for years now: Würth Industrie Service, Würth Elektronik eiSos, Arnold Umformtechnik and Reca Norm are prime examples. In addition to these established entities, the Würth Group also strengthened its market presence in Germany by making acquisitions in 2015. With effect from Janu-ary 2, 2015, the company increased its stake in Paravan GmbH in Pfronstetten- Aichelau to 51 percent. Paravan is a globally leading manu facturer of customized vehicles for the disabled and distinguishes itself by being highly innovative. Paravan has performed more than 5,000 drive-by-wire controlled vehicle conversions in recent years, giv-ing wheelchair users unlimited auto-mobility. Paravan had 153 employ-ees on its payroll and generated sales of EUR 20 million in 2015. Würth believes that the future collaboration and Paravan’s technology offer huge potential on the global market for fully automated driving.

Germany recorded a total operating result of EUR 291 million (2014: EUR 290 million) and is therefore the most profitable region. Out of a total of 31,000 sales representatives worldwide, 5,972 of them are employed in Germany.

Western Europe achieved sales growth of 3.8 percent in 2015, bringing sales up to EUR 1,742 million after they had virtually stag-nated in the previous year, with growth of 1.8 percent. This region includes not only the Netherlands, but also Austria, France and Swit-zerland, for example, where a total of more than 10,000 employees, including 5,771 sales representatives, work for the Würth Group. Despite difficulties on the domestic market, the sales of the Swiss com-panies benefited from exchange rate developments, achieving growth that just made it into the double digits, calculated in euro. Due to its sales volume, France has a considerable impact on the region as a whole. Sales in France only increased slightly last year as the Würth

Sales of the Würth Group in millions of EUR 2015 2014 %

Würth Line Germany 1,682 1,574 + 6.9Allied Companies Germany 3,115 3,016 + 3.3

Würth Group Germany 4,797 4,590 + 4.5Würth Group International 6,250 5,536 + 12.9

Würth Group total 11,047 10,126 + 9.1

43

THE WÜRTH GROUP AROUND THE WORLD Countries in which Würth is represented

Group was unable to escape the overall economic development. West-ern Europe is the Group’s second largest sales region after Germany.

With a marked increase in sales of 28.4 percent to EUR 1,531 million, the Americas region reported a successful 2015 fiscal year. While the region reaped considerable benefits from exchange rate effects, growth still came in at 12.5 percent in local currency terms. The US generated the highest sales in the Group at EUR 1,213 million (+ 37.7 percent) and remains a focus market for the Würth Group. The solid economic situation in the US was once again reflected in the sales development of the companies in the US group in 2015: In US dollars,

sales growth came to 15.1 percent. Part of the Würth Group’s growth strategy involves using targeted acquisitions to complement successful business areas where it makes sense to do so. The US has always been a focal point for such activities in the past, and 2015 was no exception. We acquired the business operations of United Plywoods & Lumber, Inc., Birmingham, Alabama, last year – a transaction that took effect on January 2. The company forms part of the Wood Division in the US. On July 31, 2015, Würth acquired 100 percent of the shares in Northern Safety Co., Inc., which is based in Frankfort, New York. The company generated sales of 179 million US dollars in 2015 and employed a total workforce of 484. Northern Safety specializes in

44


the distribution of industrial safety products and primarily supplies industrial companies, making it an ideal addition to our existing indus-trial activities in the US. The third acquisition, which took effect on October 9, 2015, was Des Moines Bolt Supply, Inc., based in Iowa, US, a company that was set up in 1978. In the future, the company will operate under the name Wurth Des Moines Bolt Inc. as an indepen-dent company of Würth Industry of North America (WINA). WINA, which consists of eight companies, is one of the largest providers of assembly technology in the US and generated sales of 452 million US dollars in 2015. The acquisition will not only provide Würth Industry of North America with more than 1,000 customers, but will also allow it to expand its regional network west of the Mississippi. In the 2015 fis-cal year, Des Moines Bolt reported sales of 42 million US dollars and employed a workforce of 96.

Unlike in North America, exchange rate developments in South America had a pronounced negative impact on growth. Whereas sales, calculated in euro, were down by 5.5 percent, the growth rate after exchange rate adjustments came in at 2.4 percent.

The Southern European region increased its share of total sales to above the 10 percent mark again thanks to positive sales devel-opment. The companies achieved sales in the amount of EUR 1,174 million, up by 21.5 percent. Spain, in particular, was able to make considerable gains, increasing its sales by 10.8 percent. At 28.4 percent, growth in Italy benefited considerably from the takeover of 65 percent of the shares in Elektrogroßhandelsgesellschaft MEF S.r.l., which has its registered office in Florence. MEF, which was set up in 1968, generated sales of EUR 130 million in 2015 and employed 532 people in 33 branch offices. The product range largely includes lighting, low-voltage distribution and control, renewable energy, cables and industrial automation technology. It is rounded off by a wide range of customer and support services. This takeover has allowed the Electrical Wholesale unit to expand its sphere of influence, which already covers eight European countries, to include one of the largest electrical wholesale markets in Europe. In addition to encouraging sales development, the Southern European region also managed to maintain its leading position in terms of the number of sales force employees. 6,497 colleagues attend to the needs of our customers.

2015 in %

2015 in millions

of EUR

2014 in millions

of EUR

Change in %

Germany

43.4

4,797

4,590

+ 4.5

Western Europe

15.8

1,742

1,679

+ 3.8

America

13.9

1,531

1,192

+ 28.4

Southern Europe

10.6

1,174

966

+ 21.5

Scandinavia

6.7

744

757

– 1.7

Asia, Africa, Oceania

4.9

544

463

+ 17.5

Eastern Europe

4.7

515

479

+ 7.5

Total

11,047

10,126

+ 9.1

SALESRegions of the Würth Group

45

2015 in %

2015 2014 Change in %

Germany

30.7

21,145

20,226

+ 4.5

Western Europe

15.4

10,663

10,455

+ 2.0

America

11.9

8,197

7,369

+ 11.2

Southern Europe

14.1

9,729

8,754

+ 11.1

Scandinavia

4.7

3,225

3,258

– 1.0

Asia, Africa, Oceania

14.4

9,922

10,062

– 1.4

Eastern Europe

8.8

6,097

5,920

+ 3.0

Total

68,978

66,044

+ 4.4

The Scandinavian region is home to one of the model companies in the Würth Group, Würth Finland. With four decades of operations behind it, the company impresses with its excellent market penetration and high profitability. The branch office concept is the decisive success factor here. Würth Finland now has 186 branch offices, more than ten percent of all the Group’s branch offices. The entity therefore also spearheaded the spread of this successful sales concept within the Würth Line in recent years. Despite the excellent position enjoyed by Würth Finland, the Scandinavian region was the only one to report a drop in sales, namely in the amount of 1.7 percent. This meant that its share of sales fell to 6.7 percent. Although exchange rate effects were at play here – the region grew by 1.6 percent in local currency terms – supporting measures have been taken within individual companies.

The share of sales attributable to the Asia, Africa and Oceania region increased from 4.6 percent to 4.9 percent last year. Although the region is very large in terms of area, the companies in Asia, Africa and Oceania still only play a minor role for the Würth Group at pres-ent. With sales of EUR 373 million, Asia accounts for what is by far the

EMPLOYEES Regions of the Würth Group

largest share of sales in the region, and Würth also sees the region as its “market of the future” in the east. We believe that China, in par-ticular, offers considerable untapped market potential. In addition to direct sales serving the trades, we also provide system solutions for industrial customers in China and have set up three production sites over the past few years. In addition to the manufacture of screws, these production sites also develop and manufacture products for the Chemicals unit and produce coils for the Electronics unit.

The pace of growth in Eastern Europe picked up again compared with 2014. This region’s share of total Group sales remained stable, with sales rising by 7.5 percent to EUR 515 million. As in the previous year, however, the slide in the Russian rouble played a major role in this development. After adjustments for currency effects, growth in the region therefore comes in at 11 percent. Although the region only accounts for a small share of the Würth Group’s total sales, Eastern Europe is nevertheless home to more than 3,200 sales representatives, i.e. more than ten percent of the Group’s total sales force.

46


THE BUSINESS UNITS OF THE WÜRTH GROUP

THE WÜRTH LINE DIVISIONS

Würth Line operations focus on assembly and fastening materials, supplying customers in both trade and industry. Within Würth Line, the operating business units are split into Metal, Auto, Industry, Wood and Construction Divisions at the international level.

16.0%

13.6%10.7%

10.1%

6.2%

METAL

AUTO

INDUSTRY

WOOD

CONSTRUCTION

SHARE OF SALES OF THE DIVISIONS in relation to the Würth Group’s total sales

47

Metal Division

Range, system and customer management play key roles in the Metal Division. The focus is on what are known as “application worlds”, which suggest products to customers that suit various work steps. This allows us to focus on our customers’ needs in a more targeted manner.

Metal subdivisionThis subdivision directly serves customers in the metalworking and metal processing industries, and its main customers include metal and steel fabricators, fitters, and machine and vehicle manufacturers.

Installations subdivisionThis subdivision concentrates on electricians, gas, heating and water installation firms, as well as air-conditioning and ventilation system engineers.

Maintenance subdivisionThis subdivision addresses an extremely wide range of customers: in-house repair shops of industrial enterprises, hotels, shopping centers, airports and hospitals.

Auto Division

Proximity to customers is a key success factor for the Auto Division. In order to ensure that we can collaborate efficiently with our customers in the future too, with a firm focus on their needs, we are constantly investing in initial and further training for our sales team. Strategic partnerships are also used to strengthen important expert areas and meet the rising technical demands on the market.

Car subdivisionThe customers of the car subdivision are car garages, vehicle fleets, automotive refurbishers and car dealers. They include authorized dealerships of car manufacturers and independent workshops as well as special shops and service providers.

Cargo subdivisionThe customers of the Cargo subdivision are authorized dealers and independent workshops, freight forwarders and transportation com-panies, public-sector utilities and waste disposal companies, as well as companies from the agricultural sector.

48


SALES BY DIVISIONSin millions of EUR

Industry Division

The Industry Division offers a complete range of assembly and connecting materials for industrial production, as well as mainte-nance and repair. Its strengths lie in individual supply and service concepts for logistics and materials planning, as well as technical consultation.

The innovative further development of procurement and logistics systems is increasing the role of systems and full automation in stocking and replenishing Würth products for manufacturing customers. The focus is on maximum supply security directly at the place of consumption, in the warehouse and at the workstation. The focus remains on personal on-site customer service thanks to a global network and, as a result, the same high standards of quality, products and processes across the globe.

Wood Division

The Wood Division serves customers in the entire woodworking and wood processing trade, focusing on: joiners / carpenters, window makers (wood and vinyl) and window fitters.

The product spectrum covers furniture and building fittings, the entire range of fastening materials and sealing technology, as

0

200

400

600

800

1000

1200

1400

1600

1800

2000

METAL

AUTO

WOODINDUSTRY

CONSTRUCTION

2012 2013 2014

1,413

1,650

932823

586

1,673

1,451

966920

598

2011

1,200

400

1,600

800

2015

1,619

1,421

971909

601

1,661

1,423

996985

638

1,765

1,502

1,1241,180

686

49

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

11000

METAL

AUTO

WOOD

2012 2013 2014

8,511

10,856

3,536

713

2,746

7,900

10,329

3,200

742

2,621

2011

CONSTRUCTION

INDUSTRY

SALES REPRESENTATIVES BY DIVISION

7,500

2,500

10,000

5,000

2015

7,451

9,628

3,031

775

2,458

7,744

9,762

3,043

842

2,585

7,942

10,018

3,099

965

2,769

well as hand tools, machines, abrasives and chemical-technical products. It is also pressing ahead with the use of online-based ordering services and the development of planning aids, such as a furniture construction configurator.

Construction Division

The Construction Division aims to offer internationally active construction companies across the globe with top-level products and services.

The Construction Division encompasses all sales units responsible for serving customers in the construction and civil engineering industry and finishing trades. Marketing activity focuses on construction companies, roof and wood construction customers, finishing and facade specialists, and direct supplies to construc-tion sites. Customized logistics solutions are also provided, such as equipped material stores directly at the construction site.

50


THE BUSINESS UNITS OF THE ALLIED COMPANIES

10.7 %7.2 %

5.5 % 5.5 %

ELECTRICAL WHOLESALE

TRADE

ELECTRONICSPRODUCTION

RECA GROUP

The Allied Companies operate either in business areas adjacent to the Group’s core business or in diversified business areas, and round off the Würth Group’s portfolio. They are divided into nine strategic business units. With the exception of a small number of manufacturing companies, the majority are trading companies operating in related areas.

SHARE OF SALES – BUSINESS UNITS OF THE ALLIED COMPANIES in relation to the Würth Group’s total sales

3.5 %TOOLS

2.0 %SCREWS AND STANDARD PARTS

1.0 %FINANCIAL SERVICES

OTHER

4.8 %

1.0 %

2.2 %CHEMICALS

51

Electrical Wholesale unit

These companies are responsible for trading in electrical material. The product portfolio includes products and systems covering the areas of electrical installation, industrial automation, cables and lines, tools, data and network technology, lighting and illumination, household appliances and multimedia products, as well as electrical domestic heating tech-nology and regenerative power generation.

SALES Electrical Wholesale unit in millions of EUR

EMPLOYEES Electrical Wholesale unit

SHARE OF TOTAL SALESElectrical Wholesale unit

300

600

900

1,200

2013 201420122011

957 988 976 1,001

1,000

2,000

3,000

4,000

2011 2012 2013 2014

2,6142,767 2,648 2,593

2015

1,186

2015

3,245

10.7%

› New sales record in 2015› The biggest Allied Companies unit at EUR 1,186 million› Sales up by 5.4 percent after adjustments to reflect acquisitions› Increase in market share thanks to organic growth and targeted

acquisitions, primarily in Southern and Eastern Europe› 576 additional employees thanks to acquisitions in 2015› 3,245 employees in Electrical Wholesale

› Marked increase in the number of customers › Construction of a new central warehouse for Uni Elektro – one

of the biggest German companies in this sector – now in the final stages, with commissioning scheduled for the fall of 2016

› Successful integration of the Italian electrical wholesaler MEF S.r.l., which has its registered office in Florence

52


Trade unit

The companies belonging to this unit sell fastening and assembly materials, gardening equipment, elec-trical tools and furniture fittings, mainly to specialist dealers, DIY and hardware stores, and discounters.

› Satisfactory sales of EUR 796 million › Sales hit by the loss of the bauMax group› High US dollar exchange rate and weak euro make purchasing

more expensive › Bundling of purchasing volumes to achieve economies of scale› Focus on customer requirements to achieve permanent improve-

ments in process and service quality

› Innovative product solutions for our customers thanks to a greater focus on sustainable product ranges

› Setting ourselves apart from the competition by positioning our own brands such as Meister, CONNEX® and CORNAT®

SALES Trade unit in millions of EUR

EMPLOYEES Trade unit

SHARE OF TOTAL SALES Trade unit

250

500

750

1,000

2013 201420122011

698 724 736 746

750

1,500

2,250

3,000

2011 2012 2013 2014

2,298 2,2282,411

2,294

2015

796

2015

2,404

7.2 %

53

› Sales up by 10.3 percent year-on-year to EUR 609 million› Loss of 40 percent of production capacity due to a major fire in the

printed circuit board factory in Niedernhall at the end of 2014 › Reconstruction in 2015 to create an innovative high-technology

factory – during the reconstruction work, customer supplies were ensured by existing factories

› Market launch of new product lines in the electronic and electro- mechanical components unit, e.g. condensers (eiCap®)

› Product portfolio expanded by the acquisition of a manufacturer of inductors for the automotive industry

› First set of license agreements for the connector technology SKEDD®

› Stake in Paravan GmbH, a manufacturer of mobility products for the disabled, upped to 51 percent

› Revolutionary SPACE-DRIVE-II technology unveiled at the inter-national automotive exhibition IAA and on the Solitude Revival race course

SALESElectronics unit in millions of EUR

EMPLOYEES Electronics unit

SHARE OF TOTAL SALES Electronics unit

200

400

600

800

2013 201420122011

712 691

504552

2,000

4,000

6,000

8,000

2011 2012 2013 2014

6,255 6,219 6,286

7,503

Electronics unit

The Würth Elektronik Group produces and sells electronic components such as printed circuit boards, electronic and electro-mechanical elements and full systems components. The company Paravan has formed part of the Electronics unit since 2015.

2015

609

2015

7,379

5.5 %

54


Production unit

The product range of the production businesses includes operating equipment, vehicle outfitting material, cold formed parts, forming and stamping tools, connecting elements and fastening systems, furniture fittings, and assortment and storage bins. The business supplies a range of customers, including customers from the automotive industry, manufacturers of kitchens and household devices, and wholesalers.

› Positive development in sales and operating result among compa-nies in the automotive, electronics and construction segments

› Sales down in local currency terms at companies outside of Euro-pean Monetary Union due to negative currency effects

› Companies belonging to the Arnold Group, a global systems pro-vider, concentrate on expanding specialized production structures

› Establishment of a new organizational structure that focuses on customer benefits

› Expansion of expertise and resources to effectively tap into growth markets (e.g. timber engineering and industrial roof and facade construction)

› Sales up in the furniture fittings segment thanks to innovative products and new systems technology

› 2015 interzum Award goes to Grass GmbH for its Nova Pro Scala® drawer system (as part of the Red Dot and Koelnmesse design competition)

SALES Production unit in millions of EUR

EMPLOYEESProduction unit

SHARE OF TOTAL SALES Production unit

200

400

600

800

2013 201420122011

476 503 532568

1,500

3,000

4,500

6,000

2011 2012 2013 2014

4,265 4,376 4,5394,078

2015

605

2015

4,765

5.5 %

55

› New record sales of EUR 527 million › Companies enjoy very good market position in Germany, Austria

and Italy› Evidence of positive economic trends, particularly in Southern and

Eastern Europe › Slight price increases due to currency erosion (euro against the

US dollar)› Further expansion of customer base by taking targeted measures

to attract new customers

› Considerable free market potential despite high density of competition› Focus on the further development of e-business and the introduction

of an iPad-based sales solution at many companies› Positive business developments thanks to the further expansion of

multi-channel distribution and the associated strengthening of the sales force

› Outlook for the future remains positive thanks to typical business of direct selling with a sales force of 2,725

SALESRECA Group unit in millions of EUR

EMPLOYEESRECA Group unit

SHARE OF TOTAL SALESRECA Group unit

150

300

450

600

2013 201420122011

492 493 482 499

1,000

2,000

3,000

4,000

2011 2012 2013 2014

3,7943,585 3,483 3,524

RECA Group unit

The RECA Group companies supply tools and assembly and fastening materials directly to indus-trial, metal and car business customers, as well as to customers in the Cargo subdivision. Specialists in workwear, advertising materials and vehicle equipment complement the product portfolio.

2015

527

2015

3,652

4.8 %

56


Tools unit

The companies in the Tools unit distribute items for metal cutting, clamping and measuring, as well as hand tools, operating equipment, industrial safety and machines. They supply companies from the metal working and metal-processing industries. Their activities focus on the distribution of the unit’s own brand, ATORN®.

› New Hahn+Kolb Web portal goes live, enabling access to more than 60,000 items and access to extensive company, service and additional information for customers

› Modern web design allows optimum display on all end devices › New subsidiary of the Hahn+Kolb Group set up in Mexico› Expansion of the sales force to boost distribution strength

› 2016: Focus on the further development of the unit’s own brand, ATORN®, investments in tool vending systems, increasing produc-tivity and the further expansion of the customer base.

› VDMA (German Engineering Federation) outlook for 2016: no production growth to speak of in the German mechanical and plant engineering sector

SALESTools unit in millions of EUR

EMPLOYEESTools unit

SHARE OF TOTAL SALESTools unit

100

200

300

400

2013 201420122011

352 355 342369

500

1,000

1,500

2,000

2011 2012 2013 2014

1,491 1,540 1,6101,573

2015

381

2015

1,644

3.5 %

57

Chemicals unit

The companies in the Chemicals unit are responsible for the development, manufacture and distribution of chemical products for the automotive, industrial and cosmetics industries. They distribute both their own brands and private label products and are renowned as real innovation specialists and experts in their niche areas.

› Slight increase in sales to EUR 240 million › Sales have more then doubled since 2011› Production forms one of the unit’s key components – it now has

nine factories on three continents › Greater focus on the cross-company use of the customer and

cooperation network to exploit new potential within the unit (e.g. local sourcing in Brazil and China)

› Further standardization and harmonization of core processes within the unit in order to boost efficiency in the long term

› Aftermarket problem solutions for new engine systems thanks to new automotive developments

› In the industrial lubricants segment, further focus on products that have been optimized in terms of human toxicology and ecotoxicology

› Restructuring of the cosmetics segment in 2016 › Investments to boost competitiveness

SALESChemicals unit in millions of EUR

EMPLOYEESChemicals unit

SHARE OF TOTAL SALESChemicals unit

75

150

225

300

2013 201420122011

112

143

189

236

400

800

1,200

1,600

2011 2012 2013 2014

848

1,1051,229 1,211

2015

240

2015

1,246

2.2 %

58


Screws and Standard Parts unit

These trading companies are product specialists with sophisticated industry supply concepts. The unit’s main business activity is the sale of DIN and standard parts. Most of the companies specialize in stainless connecting elements. Our hydraulic companies are system providers of hydraulic hoses and fittings.

› Sales in 2015 focused primarily on the distribution of DIN and stan-dard stainless steel parts

› First half of 2015: positive development at stainless steel companies thanks to rising /stable nickel prices

› Nickel price slumps by 30 percent in the second half of the year› Further expansion of customer base › New administrative building and expansion of logistics facilities at

WASI in Wuppertal, construction work to start in 2016

› Hydraulics segment: moves to step up national and international expansion via system partnerships and cooperation within the Würth Group

› Intensified marketing of innovations, such as the super power hoses or the unit’s own brand, ValCon®

› Distribution to focus on major customers from the maintenance sector, e.g. in the transport and automotive industries

SALESScrews and Standard Parts unit in millions of EUR

EMPLOYEESScrews and Standard Parts unit

SHARE OF TOTAL SALESScrews and Standard Parts unit

100

200

300

400

2013 201420122011

276259

237 232

300

600

900

1,200

2011 2012 2013 2014

1,082 1,0761,029 1,065

2015

225

2015

1,071

2.0 %

59

Financial Services unit

The companies in this unit offer services in the finan-cial services sector both within the Würth Group and for external customers. Sales orientation, proximity to the customer and customized products rank among the strengths of this unit.

› Companies specializing in leases maintain their market position in Germany, Denmark and Switzerland despite a glut of liquidity

› Waldenburger Versicherung AG: further ongoing growth in pre-mium volume

› As in the previous year, individual large-scale claims put consider-able pressure on results

› Internationales Bankhaus Bodensee AG (IBB): double-digit earn-ings growth in a fiercely competitive banking market

› Long-term earnings stability despite the low interest rate phase thanks to IBB’s robust business model

› Establishment of Würth Financial Services AG among the biggest and fastest-growing insurance brokers in Switzerland

› Further market share gained in 2015 thanks to organic growth › 2016: planned expansion of leasing activities in Austria

SALES Financial Services unit in millions of EUR

EMPLOYEES Financial Services unit

SHARE OF TOTAL SALESFinancial Services unit

30

60

90

120

2013 201420122011

85

104109 106

100

200

300

400

2011 2012 2013 2014

300

353375

339

2015

111

2015

391

1.0 %

60


Net assets, financial position and results of earnings

• Operating result up slightly year-on-year • Equity exceeds the EUR 4 billion mark for the first time• Investments of more than EUR 500 million

In the fiscal year under review, the operating result of the Würth Group came to EUR 525 million, up by 1.9 percent on the previous year (2014: EUR 515 million). Although sales growth was almost in the double digits at 9.1 percent, the operating result showed only moderate development and the return on sales fell to 4.8 percent. We have calculated the oper-ating result as earnings before taxes, before amortization of goodwill and financial assets, and before changes recognized in profit or loss from non-controlling interests disclosed as liabilities.

The companies outside of Germany boosted their operating result by 4.0 percent to EUR 234 million (2014: EUR 225 million), meaning that they grew much faster than in the previous year. This momentum is partially due, to the positive development in the Southern Europe

region, which showed a marked improvement after years of hefty slumps, even if it has still not bounced back to the usual level of profit-ability. Spain, in particular, showed very positive development, while there is still a need for restructuring in Italy. The wind power segment also contributed to the improvement in the operating result, even if it failed to live up to expectations. We believe that Brazil is a critical market from an economic perspective. Brazil is the Würth Group’s largest market in South America in absolute terms and is battling with a significant economic downturn.

The German companies achieved an operating result that was on a par with the previous year’s level. At EUR 291 million, it was up by 0.3 percent on the 2014 value (EUR 290 million). This corresponds to 55.4 percent of the Group’s overall result, which serves to highlight just how important the domestic market still is. While there are myriad reasons behind the stagnation, it can be traced back primarily to an increase in the ratio of cost of materials to sales, and investments in the sales force. This situation was also compounded, for example, by restructuring measures in the Chemicals unit, which prevented a more pronounced increase in the operating result for the 2015 fiscal year.

PRE-TAX OPERATING RESULT AND RETURN ON SALESWürth Group

150

6.7 7.56.2

3.14.5 4.1

300 10.0

450

600

2006 2007 2008 2009 2010 2011 2012 2013 2014

515

640

545

235

385 395415

445

515

4.2 4.6 5.0

Operating result in millions of EUR

Return on sales as a percentage

2015

525

4.85.1

61

Out of the German entities, Adolf Würth GmbH & Co. KG makes by far the biggest contribution to the operating result. With an operating result of more than EUR 100 million, the Group’s flagship once again provided evidence of its earnings strength. Other top performers in Germany are Würth Industrie Service, Arnold Umformtechnik, Reca Norm and Würth Elektronik eiSos. On the whole, the operating result stagnated in Germany, pushing the return on sales down to 6.1 per-cent (2014: 6.3 percent).

The cost ratio of materials to sales increased year-on-year to 49.1 percent (2014: 48.1 percent). Despite lower commodity prices in some cases, a shift in sales within the different distribution channels towards key accounts and also e-business had a slightly negative impact in this regard, in addition to constantly increasing price trans-parency on the markets. Another negative effect came in the form of the lower gross profit within Würth Elektronik Group due to the fire in the printed circuit board factory in Niedernhall at the end of 2014.

The pronounced increase in other operating income in the amount of more than 100 percent is largely due to insurance settlements in connection with the fire in the Würth Elektronik printed circuit board factory in Niedernhall.

At the end of December 2015, the Würth Group had a total of 68,978 employees. The increase in the workforce by 2,934 compared with December 2014 was one of the reasons behind the sales growth that the company achieved, as face-to-face contact is the strength of our direct distribution approach. The sales force works hand in hand with our highly effective in-house staff, which provides the necessary support for the specific sales strategy. 1,777 additional employees joined the sales team in 2015. The number of employees working as members of the in-house staff rose by 4.9 percent, or 1.8 percent after adjustments to reflect acquisitions. At 28.0 percent, the ratio of personnel expenses to sales improved slightly compared with the pre-vious year (2014: 28.1 percent).

At EUR 332 million, amortization and depreciation was up con-siderably on the prior year in 2015 (2014: EUR 278 million). This increase is primarily attributable to increased impairment losses in the electronics area. Amortization and depreciation are also up on the previous year due to increasing investments, although this effect is not quite as significant.

Other operating expenses showed a slightly above-average year-on-year increase in relation to sales growth. At 16.2 percent, this ratio is down slightly on the prior year. By way of example, we managed to save on energy costs but saw an increase in sample and advertising expenses, as well as rental and lease costs due to the further expan-sion of the branch office network.

The financial result fell slightly. Financial liabilities increased due to the market valuation of the interest rate derivatives taken out in connection with the bond issued in 2013. An opposing effect came from interest income from prior periods. Financial liabilities increased to more than EUR 300 million. In August 2015, the Würth Group redeemed a bond in the amount of 225 million Swiss francs with an average yield of 3.88 percent. In order to finance the redemption, a benchmark bond of EUR 500 million with a 1.00 percent yield was issued in May 2015. The liquidity generated as a result was invested largely in the short term for the purposes of security, and the investment interest was close to zero percent. This also had a negative impact on net interest income.

The tax rate decreased in the 2015 fiscal year to 15.9 percent (2014: 24.5 percent), mainly due to tax reimbursements related to other periods. Contrary effects resulted, in particular, from tax losses in the current fiscal year that were not stated. For a detailed analysis, we refer to the consolidated financial statements: G. “Notes on the con-solidated income statement”, [9] “Income taxes”.

The Würth Group achieved new record sales of EUR 11 billion, which was higher than the projected value for 2015. Although the operating result only showed a moderate increase and just fell short of the target, net income for the year climbed to an all-time high of EUR 434 million. Against the backdrop of the global economic develop-ments, the Central Managing Board believes that these results are satisfactory. The main KPIs, such as sales and operating result, have improved. Our gross profit, i.e. sales minus the cost of goods sold, as well as staff turnover, inventory turnover and collection days deterio-rated slightly, but came in at an acceptable level.

Capital expenditures and cash flowAfter a slight drop in capital expenditure in 2014, much more was invested in 2015, with investment spending coming to EUR 525 million (2014: EUR 367 million). Over the past ten years, the Group has invested around EUR 4 billion in property, plants and equipment,

62


financial assets and intangible assets. It is the Würth Group’s strategy to invest in sales-related and productive areas. As a result, last year’s investments focused on the expansion of warehouse capacities for our distribution companies, as well as on the fields of production buildings and technical equipment and machinery for our manufacturing companies. The biggest individual project within this context was the reconstruction of the Würth Elektronik printed circuit board factory in Niedernhall, Germany, which was destroyed by a major fire on December 27, 2014. The aim is to achieve full production capacity utili-zation again in the course of the current fiscal year. Arnold Umform-technik, which specializes in screws and connecting technology for the automotive and electrical industry, also laid the foundation stone for three further production sites, with corresponding machinery, in Dörzbach in April 2015 – an investment with a total volume of around EUR 37 million. The aim is to expand Dörzbach as a production loca-tion for the company’s brand products and series production. The expansion of the production facilities will create 100 additional jobs. This means that in 2016 a total of 300 employees will contribute to Arnold’s success in Dörzbach. Würth Elektronik eiSos has started work on the construction of a new logistics building in Waldenburg.

The building will provide almost 5,000 m2 in additional storage space, offices and 800 m2 of laboratory space for quality assurance and product development. 85,000 shelf spaces are waiting for product boxes. The warehouse is designed to handle 10,000 picks per day and is scheduled to be commissioned in the first quarter of 2016. The total investment volume comes to EUR 25 million.

In addition to the Allied Companies, the Würth Line companies also made substantial investments in stepping up their sales activities. Back in the fall of 2014, Adolf Würth GmbH & Co. KG started build-ing its new branch and office building in Künzelsau-Gaisbach, offer-ing office space for 550 workstations and premises for conferences and seminars. The new cube-shaped building, which features an inner courtyard, will cover a total of five upper floors. The building’s direct location on Bundesstraße 19 makes it ideal for Würth’s custom-ers to reach. In the future, our customers will be able to experience the wide range of products we offer in an area covering more than 800 square meters. Around EUR 28 million is being invested in the new building in Gaisbach, which is set to be officially opened in the summer of 2016.

INVESTMENTSWürth Group in millions of EUR

200

400

600

2011 2012 2013 2014

455 465433

367

CASH FLOW FROM OPERATING ACTIVITIESWürth Group in millions of EUR

250

500

750

2011 2012 2013 2014

540618 599 612

2015

525

2015

630

63

In addition to investments in production and storage space, we have also, as in past years, invested in our ORSY® storage management system, which offers our customers storage and provision of various consumables and supplies in line with their needs.

In total, EUR 315 million, or 60 percent of the investment volume, was attributable to Germany, reflecting to the continued high significance of the home market for the Würth Group.

Thanks to our moves to optimize our investment controlling processes using sophisticated recording and analysis tools in recent years, the Central Managing Board is always in a position to react quickly to changes in the overall environment. This is another reason why we once again met our objective of financing investments in intangible assets and in property, plants and equipment from our cash flow from operating activities in full in 2015. Our cash flow from operating activ-ities came in at EUR 630 million (2014: EUR 612 million), up by 2.9 percent on the prior year. The increase in receivables and inventory accumulation stood in the way of a further increase in operating cash flow. We consider this level of cash flow from operating activities to be appropriate for us. The ratio of capital expenditures to cash flow from operating activities was 83.3 percent and was therefore up on the prior-year level (2014: 60.0 percent).

Purchasing All in all, 2015 was characterized by good capacity utilization lev-els at our suppliers due to the economic situation. After the Eurozone Purchasing Managers’ Index had closed 2014 at a relatively low level, the situation picked up throughout the course of the year, which indicates an increase in industrial production. As far as 2016 is con-cerned, we do not expect to see any significant changes for the time being, as economic experts predict that economic development will remain robust.

Prices on the commodities market developed favorably from a pur-chasing perspective, especially from the middle of the year onwards. Among the industrial metals, the price of nickel, in particular, took a nosedive, although the prices of aluminum and copper also dropped considerably. Oil prices continued to slide in 2015. By the end of the year, a barrel of Brent crude oil was traded a mere 37 US dollars. These developments on the commodities market allowed purchasing to achieve corresponding price reductions in the relevant areas.

Unlike the favorable commodities situation, currency developments posed a major challenge to purchasing. Particularly in the first half of the year, the collapse in the value of the euro made imports, particu-larly those from the US dollar area, much more expensive. There were times at which the value of the single currency plummeted to such an extent that parity between the euro and the dollar certainly appeared to be a realistic prospect. The external value of the euro also dropped against other currencies, meaning that many manufacturers outside of the euro area were forced to cut their prices.

All in all, the central purchasing organization of the Würth Line managed to keep purchasing prices stable in 2015. Würth was able to largely avert currency-related price demands and to offset them against advantages on the commodities side.

From a strategic perspective, even more of an emphasis is to be placed on the coordinated purchasing of indirect goods such as operating resources, energy and packaging material by the central purchasing organization. The harmonization of the ERP systems and the article master data allowed cross-company purchasing processes to be opti-mized further. The aim is to continue to forge ahead with this strategy in 2016. The main operational goal is to continue to guarantee a good service degree in 2016. What is more, inventories have to be kept largely flexible so that the company can react to changes in market conditions as quickly as possible.

Inventories and receivables As a group of mostly trading companies, inventories and accounts receivable have always been in focus at Würth. Both balance sheet items allow for short-term controlling and optimization of liquidity and tied-up capital in the Group. This involves striking the right balance between making sure that our customers are satisfied on the one hand – through offering the best delivery service and adequate payment periods – and optimizing the business-related key figures on the other hand.

The sales growth achieved in the 2015 fiscal year also pushed inven-tories and receivables up. Working capital showed an above-average increase in relation to sales, primarily due to the acquisitions.

Trade receivables rose by EUR 160 million to EUR 1,427 million (2014: EUR 1,267 million). Around EUR 73 million of this amount was

64


contributed solely by acquisitions. For years, however, sophisticated controlling systems, which enable rapid responses in the event of any indications of negative developments, and optimum interplay between sales and accounts receivable management have enabled the Würth Group to achieve a low level of receivables in relation to sales. The corresponding key figure, collection days (based on a 12-month calculation), therefore increased only slightly to 52.9 days compared with 51.8 days at the end of 2014. This is still a very good level in a multi-year comparison, especially considering that the Würth Group has operations in more than 80 countries worldwide. The number of collection days at the German companies – at 42.2 – has tradition-ally been lower than at companies outside of Germany.

We will continue to optimize accounts receivable by means of effective cooperation between sales and accounts receivable man-agement, as well as by refining our analytical tools. We see the payment patterns of debtor payments as critical in Southern Europe, China and India – which on the one hand slows growth, and on the

other hand reduces earnings due to an increasing need to recognize impairment losses.

The percentage of bad debts and the expenses from additions to value adjustments related to revenues fell slightly to 0.6 percent (2014: 0.7 percent).

We aim not just to satisfy our customers, but to inspire them. This also involves achieving a service degree that is close to the 100 percent mark. To achieve this, we are prepared to stock individual products, even where this runs contrary to all our business optimization efforts, in order to be able to deliver the goods to the customer one day after the order is placed at the latest. In 2015, we achieved this in 98 out of 100 cases.

The inventories of the Würth Group rose in 2015 by EUR 191 million to EUR 1,653 million (2014: EUR 1,462 million). These figures once again reflect the acquisitions, which contributed EUR 73 million to the

EQUITYWürth Group in millions of EUR

1,000

2,000

3,000

2011 2012 2013 2014

3,0423,204

3,3993,6834,000

2015

4,083

65

increase in inventories. Exchange rate developments were also a fac-tor, accounting for an increase of EUR 24 million. The above-average increase in inventories in relation to sales growth is also due to the fur-ther expansion of the branch office network. Furthermore, some prod-uct groups had long delivery periods so that we stepped up invento-ries here in line with our service degree policy. This ultimately meant that stock turnover, calculated on a 12-monthly basis, fell slightly from 5.1 times at the end of 2014 to 4.9 times.

Financing The equity of the Würth Group climbed by EUR 400 million to EUR 4,083 million in 2015 fiscal year (2014: EUR 3,683 million). This puts the equity ratio at 44.3 percent, compared to 45.2 percent at the end of 2014. This is a considerable equity ratio for a trading company. For years, a comfortable equity capitalization has been the basis of solid financing of our group of companies and strength-ens the customers’ and suppliers’ trust in the Würth Group. This is due to the typical family business approach of reinvesting a large portion of profits in the company. The high level of equity financing allows the company to be relatively independent of external capital providers.

Total assets rose by EUR 1,068 million to EUR 9,210 million (2014: EUR 8,142 million). The marked increase of 13.1 percent is largely due to the increase in intangible assets due to acquisitions, and to the increase in property, plants and equipment, inventories, and receiv-ables, also due to acquisitions. Financial liabilities increased due to the issue of the bond in May 2015. The financial services activities remained virtually unchanged as far as total assets are concerned. Refinancing in the banking sector was mainly achieved through financial intermediaries and refinancing programs launched by the European Central Bank, while refinancing in the leasing segment was achieved mainly through the ABCP (Asset Backed Commercial Paper) program created especially for this purpose, as well as through non-recourse financing.

The Würth Group has undergone an annual rating process for more than 20 years now. The leading rating agency Standard & Poor’s once again confirmed the Würth Group’s “A / outlook stable” rating in 2015. This rating reflects the confidence that business and the financial KPIs will continue to develop successfully. The opportunities and potential of the Würth Group are viewed in a positive light. Our

long history of good ratings not only documents the positive credit rating; at the same time, it is proof of the continuous and successful development of our corporate group and the stability of our business model.

The Würth Group made the most of the attractive conditions on the capital markets to take up long-term funds and placed a bond worth EUR 500 million on the market in May 2015. The bond has a maturity period of seven years and carries an interest coupon of 1.00 per-cent p.a. The issue allowed the Würth Group to strengthen its long-term funding and liquidity basis for the Group’s further growth. The average term of the outstanding financial liabilities of the Würth Group has been extended considerably. The redemption of a bond worth 225 million Swiss francs and carrying an interest coupon of 3.88 percent in August 2015 reduced the average interest rate on the interest-bearing debt capital of the Würth Group by more than half a percentage point.

This means that, at the end of the 2015 fiscal year, the Würth Group had three bonds issued on the capital market and one private place-ment. All covenants in this context have been complied with. In 2018, 2020 and 2022, bonds worth EUR 500 million each will reach matu-rity, while the private placement of 200 million US dollars is set to reach maturity in 2021. The maturity profile is thus well balanced. For further details of the maturity profile and interest structure, please refer to the consolidated financial statements: H. “Notes on the consoli-dated statement of financial position”, [24] “Financial liabilities”.

As at December 31, 2015, the Würth Group had liquid funds of EUR 616 million (2014: EUR 602 million). In addition, the Group has a fixed line of credit of EUR 200 million, which remains undrawn to date, provided by a syndicate of banks until February 2018. Net debt increased from EUR 841 million to EUR 1,141 million. In order to exploit the current favorable interest rate level and in order to strengthen the long-term financing and liquidity basis of the Würth Group as a basis for future growth opportunities along with invest-ments, the Würth Group launched a “Euro Medium Term Note” program in 2015. This program will make us more flexible in issuing future bonds and private placements.

66


Research and development

In addition to successful sales, outstanding logistics and cost-focused action, new products and customer service innovations are crucial when it comes to securing the competitive standing of the Würth Group.

In the 2015 fiscal year, for example, Adolf Würth GmbH & Co. KG generated a fifth of its sales with products that are no more than three years old. This is a very good proportion for a company that special-izes in sales. The innovation rate is also high throughout the Group: At present, the Group has 613 active patents, 18 utility models, 446 registered designs, and 6,744 active brands.

Developments within the Würth Line

The new ORSY® system case by Würth – have everything at your fingertips at all timesThe uniform grid dimensions form the basis for the ORSY® system range. All system elements are compatible, can be combined and fit into a whole range of mobile and stationary installations – be it a case, the ORSY®1 shelf system, ORSY®BULL or ORSY®mobil. The integrated runner outline and the connecting elements allow cases to be joined together and then carried and stored as one entity. The system case is made of particularly scratch-resistant thermoplastic resin, making it resistant to oils and lubricants, changes in temperature and climatic influences. Inside, the cases can be equipped with inlays made of foam or plastic and / or assorted boxes, depending on their intended purpose and requirements. There are plans to expand the system range to include workbenches and tool trolleys, containers and storage boxes, as well as socket wrenches, drills and bit boxes.

Cold-melt technology revolutionizes light-weight construction: cold-melting as opposed to bondingWürth is using cold-melt technology to revolutionize light-weight construction using wood materials: The trademarked WoodWelding® technology developed by WW WoodWelding GmbH from Switzer-land formed the basis for a development that paved the way for the innovative, hand-operated cold-melting device KSG-E. At the same time, the corresponding fasteners (cold-melt anchor screws) were developed to reliably hold the top layers of lightweight panels together without the use of adhesives. The hand-held device uses

ultrasound to melt thermoplastic fasteners at an oscillation frequency of 20,000 Hz. The molten thermoplastic resin flows into the cavities in the wood material and becomes firmly embedded when it cools to create a reliable connection. Very little heat is produced during the melting process. This means that the cold-melting device offers users a fast solution for creating connection points in lightweight panels, while at the same time enabling user-friendly application.

W-UR 10 SymCon®: the most universal Würth plastic frame dowelThe Würth plastic frame dowel W-UR 10 SymCon® can be used, on the basis of European Technical Approval ETA-11 / 0309, for the multiple anchoring of non-load-bearing systems in concrete and masonry. The product has also been granted a new general construc-tion permit for use as a form of individual fastening in cracked and non-cracked standard concrete. Unlike with conventional products, the permit for the product allows for variation between three different setting depths in concrete surfaces. In order to make application as straightforward as possible, all setting depths are marked on the polyamide dowel sleeve. The matching SymCon® screw is available in the quality materials “galvanized steel” and “stainless steel”. Since the dowel sleeve does not rotate while screwing, the dowel screw only requires a low tightening torque. The special geometry of the SymCon® screw allows for effective and safe expansion later on in the event of an increased load on, or cracking in the anchoring base.

Adolf Würth GmbH & Co. KG: success story for innovative service App as the company strives towards service leadershipThe Würth Service App has taken mobile service in the industry to a level never seen before: A unique search function means that more than 250 Würth services can be found using the App. The App is a personal assistant that users can communicate with directly using voice recognition. A customer survey was used to define the key App functions. In addition to questions on Würth services such as machinery leasing or wood construction planning, the Würth Service App can also provide users with information on delivery status or contact details for product and application advice, as well as infor-mation on payments received. The App also learns new things every day, because all of the questions that return no hits are checked and information is added accordingly. This allows it to answer virtually all Würth-related questions that arise in a craftsman’s day-to-day work.

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The App is a true innovation for the sector and can be downloaded from the iOS and Android App stores.

Würth Industrie: innovation in container development – extremely small containers and the first sustainable containerNowadays, C-parts management is all about efficient processes, digital and transparent data management, system customization and the development of innovative, sustainable technology. The new extremely small container developed by Würth Industrie Service has the lowest volume offered to date compared with the Würth small-load carriers based on the VDA standard. It is ideal for direct supplies to individual workstations and, as a result, for delivery to the place of consumption. Another new development by Würth Industrie Service, the new sus-tainable container, also incorporates ecological aspects into C-part supplies. It is the first sustainable Kanban container of its kind, con-sisting of 30% organic granulate. The ecological components of the granulate are manufactured using sunflower seed shells, originally a waste product from the food industry, and help to reduce the carbon footprint of the production process. Industrial companies can use the sustainable container to improve their environmental footprint.

Official opening of IT technology centerIn June 2015, the Würth Group commissioned its new technology center, covering an area of 1,000 square meters of energy-efficient data center space and 125 workstations. The IT technology center in Niedernhall is the new “digital heart” of the Würth Group. The archi-tecturally trendsetting data center forms part of what is known as the “Hohenlohe Ring” together with the existing data centers in Gaisbach and Waldenburg. As a real-time back-up network, it marks a milestone in the IT availability and IT security of the entire Group. Thanks to mod-ern air conditioning technology, including waste heat recovery using heat exchangers, the data center will use 70 percent less energy than comparable facilities.

Developments within the Allied Companies

The Allied Companies of the Würth Group also invested in the devel-opment of products and services to offer their customers the best pos-sible solutions in 2015.

TOGE: the concrete screw that is setting new standardsTOGE Dübel GmbH & Co. KG is not just one of the true market pio-neers when it comes to the development and production of metal anchors for fastening windows, radiators, suspended ceilings, insulation and fire protection plates; it is also a pioneer in the field of concrete screws: In 2015, TOGE received European Technical Assessments (ETAs) for its newly developed concrete screw, confirming that the screw can be used in a large number of applications, for example individual fastening in concrete or multiple fastening in hollow pre-stressed concrete plate ceilings and even for post-assembly adjust-ments. The TOGE concrete screws measuring up to two meters in length are now being used, with the approval of Germany’s Federal Railway Office (Eisenbahnbundesamt), in the renovation of bridge structures that are at risk of collapsing. TOGE® concrete screws allow these bridges to be repaired while they are still in use, extending their service life by an average of 25 years.

Reisser: the chipless duo – chipless application in sandwich and trapezoidal roofsReisser Schraubentechnik is the only manufacturer to offer chipless application in sandwich and trapezoidal roofs on timber substructures with the approval of the construction supervisory authorities. The new chipless duo consists of the butt joint screw and the Refabo® Plus Sand-wich. Both screws have been approved by the construction supervisory authorities. The special tip of the butt joint screw allows material dis-placement and, as a result, no chip removal. The screw penetrates the sheet chip-free, at the same time forming a thread in the substructure. Like the butt joint screw, the Refabo® Plus Sandwich works based on the principle of flow drill screwing – the material is displaced chip-free. The downstream patented DRIBO® milling cutter between the two threads allows for chip-free screwing into the timber substructure, removing the need for pre-drilling. The sealing of the connection is supported consid-erably by the double under-head thread. There is no longer any need to clean the roof to remove chips after assembly, eliminating the risk of any associated complaints. When used as a duo, the two products enable a high level of application security and speed.

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Tunap: the specialist for lubrication, maintenance and cleaningTunap develops, produces and sells chemical products in the areas of special lubricants, cleaning products, chemical-technical problem- solvers and aerosols for the automotive aftermarket and industry. In 2015, the focus in the automotive segment was on aftermarket prob-lem solutions for the new engine systems introduced in response to global moves to step up emission standards (in Europe: Euro 6). Dirt and deposits collect at the exhaust gas recirculation valve, depending on driving style and the quality of fuel. The products based on Tunap’s XFoam technology® allow these deposits and dirt to be removed in only 20 minutes. With its direct cleaning systems, Tunap also provides solutions for deposits in the combustion chambers of gasoline direct injection engines, which can result in pre-ignition and irregular engine operation and an increase in fuel consumption and emissions. In the industrial lubricants segment, Tunap continues to focus on products that have been optimized in terms of human toxicology and ecotoxicol-ogy. By way of example, it expanded the range of products approved for use in the food industry considerably. A novel high-temperature chain oil for the food industry that can withstand very high tempera-tures is particularly worthy of mention. The full range of food contact lubricants and maintenance products for food production was also approved. Special spray systems mean that the solvents and propel-lant quantities required for aerosol development have been more than halved. This allows aerosol cans that are only half as big to be used for identical active agents and active agent quantities (concentrated sprays).

Tunap Cosmetics – a passion for the product, individual support, many years of experienceAs a private label provider of bodycare products, Tunap Cosmetics focuses on providing its trade customers with evidence of its innovative strength. In 2015, for example, the company further enhanced the VCAN packaging system – an aerosol can made of plastic. In the area of aerosol development, Tunap Cosmetics concentrated primarily on the further development of the bag-on-valve range – ideal pack-aging for environmentally friendly spray, gel and foam products, in particular, and for formulations that are sensitive to oxygen and light. The focus in 2015 was on the very successful shower gel aerosols and the hair styling / trend styling segment, in particular. In the hair styling segment, a number of trendsetting products were developed, such as the magic oil spray that turns specific styling wishes into a reality. Special hair wax types (e.g. aqua wax), matte pastes and gel pump

sprays were developed as innovations to serve niche markets, par-ticularly among drugstore customers.

Würth Elektronik GroupThe Würth Elektronik Group consists of three main independent areas: › Würth Elektronik GmbH & Co. KG Circuit Board Technology:

printed circuit boards› Würth Elektronik eiSos GmbH & Co. KG: active, passive and elec-

tromechanical components for the electronics industry› Würth Elektronik ICS GmbH & Co. KG Intelligent Connecting Sys-

tems: circuit board-based system solutions for power distribution, display and control panels, and electronic control devices

Circuit Board Technology: process for the embedding of ultra-thin chips In partnership with the technology cluster microTEC Südwest, a pro-cess was developed that allows ultra-thin chips to be embedded into flexible printed circuit boards. Embedded chips can be combined with other components (sensors, antennae), meaning that they can be manufactured at a low cost. These technologies can be used for various applications and product groups. To begin with, only a small number of the circuit carriers with the integrated construction elements and components were manufactured. The second phase involved the development of products for high-volume markets in the medical tech-nology, life science and automotive sectors. The products could be used for intelligent applications that allow physical stimuli to be mea-sured thanks to the flexibility and ultra-thin structures. In the field of medical technology, these stimuli include, for example, temperature, pulse or respiratory movements, whereas in an automotive environ-ment, the aim is to detect mechanical strain and bending and to make corresponding control devices available for further analysis. microTEC Südwest is one of the largest technology networks in Europe in the field of micro system technology. Companies and scientific institutions closely collaborate to develop and implement ideas together.

Würth Elektronik eiSos: opening of research centersA Competence Center was opened in Berlin in October 2015. Hardware and software engineers working in the Competence Center develop new solutions for application development and, at the same time, give students the opportunity to contribute their innovative ideas to the company. A design and application center was opened in Barcelona in November 2015. The development of customer-specific

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solutions focuses on the software development of design tools and cross-platform Apps, as well as the development of energy-efficient and electromagnetically compatible power inductors for innovative areas of application.

Intelligent Connecting Systems: Redline Power Box A standard housing was developed for power distribution and control in commercial vehicles: the Redline Power Box. The combination of the financially advantageous standardization of the housing and a config-urable printed circuit board that can be customized to suit individual customer needs make the Redline Power Box a novel development.

Paravan: customized solutions Paravan GmbH has formed part of the Electronics unit since 2015. The company was set up in 2005 and its product portfolio comprises customized car adaptations for the disabled, electric wheelchairs, seat collections, ramp systems, wheelchair loading lifts, manual devices, a special driving school and SPACE DRIVE, the world’s first revolution-ary drive-by-wire system authorized for road use with active redun-dancy, allowing autonomous driving. After being installed in a racing car prototype based on a World Touring Car Championship racing car, it was presented to specialists and the general public alike on the Solitude racetrack in 2015. Even at top speed, the racing car was steered without a mechanical steering column.

Risk and opportunities report

As a globally active company, the Würth Group is constantly exposed to risks, but also makes systematic use of opportunities that present themselves. Opportunities and risks can arise both as a result of our own actions or failure to act, and as a result of external factors. The risk and opportunities policy of the Würth Group is aimed at meeting the company’s medium-term financial objectives and at ensuring the sustainable, long-term growth of the Group. In order to ensure this, the Würth Group has a system that identifies entrepreneurial oppor-tunities and risks, assesses them using a standardized system, weighs them against each other, and communicates them. Our conscious and systematic approach to addressing opportunities and risks is inex-tricably linked to our entrepreneurial activities.

Functioning of the risk management systemThe Würth Group has a three-tier risk management system (RMS), comprising the cyclical monitoring system of the internal audit func-tion, Group controlling and the early warning system. The Central Managing Board of the Würth Group holds overall responsibility for the Group-wide risk management process and defines the principles of our risk policy and risk strategy. Responsibility for the installation of a functioning and efficient RMS in the Group companies is the task of the management of each entity within the Group. They are supported by the risk manager, who reports directly to the Central Managing Board of the Würth Group and coordinates risk manage-ment at the Group level. The risk manager is in close contact with the risk controller of the Advisory Board, who reports directly to the Chairperson of the Advisory Board.

How the financial reporting internal control system worksThe aim of the financial reporting internal control system is to ensure that all business transactions are completely recorded and correctly evaluated with regard to the financial reporting requirements.

The Würth Information System is a significant component of the financial reporting internal control and risk management system of the Würth Group. With the help of this reporting system, all key performance indicators required to steer the Würth Group are presented and prepared for analysis by the Central Managing Board and Executive Board in addition to standardized monthly reporting.

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System-based control mechanisms such as validation and cross-checks optimize the quality of the information as a basis for decision-making. A Group-wide online record of the financial statements of the Group entities is not only efficient; it also avoids carry-over errors, safeguards uniform provision of information and includes numerous plausibility checks, without which the information cannot be forwarded. This plat-form also ensures that financial reporting changes are implemented in a uniform way across the Group. Data is protected from changes by using control numbers and a system of IT access rights. Standard software is used for consolidation. Changes in the system settings are logged centrally. The monthly and annual financial statements of Group companies are subject to regular automated assessment mechanisms, as are the consolidated financial statements. Moreover, Würth’s “Policy And Procedure” (PAP) manual contains internal proce-dural instructions. Internal publications and training include detailed rules on financial reporting. Compliance with these rules is regularly reviewed by the internal audit function. External specialists are con-sulted to clarify the implications of legal and tax issues on accounting. External actuaries calculate pensions and similar obligations. Central and local training for those in charge of finance departments also

ensures that all employees involved in the financial reporting process are up to date on the latest legislation and information of relevance to them.

The opportunity and risk management process is updated within the Würth Group on an ongoing basis and adapted to changes in the Group or in its economic and legal environment. In the 2015 fiscal year, the IT-based risk reporting system was put in place at further Group companies and the Executive Vice Presidents were more involved in the risk management process.

Risks

The Central Managing Board identifies, analyzes and assesses the Group’s opportunities and risks at a dedicated annual workshop. This workshop determines focus risks which could pose a threat to the net assets, financial position and results of operations of individual entities or the Würth Group as a whole in the short, medium or long term. Furthermore, with the support of the Risk Manager, all major Group

RISK DEVELOPMENTWürth Group December 31, 2014 – December 31, 2015

Economic Environment Business Model

slight increase unchanged slight decrease

IT Structures

Human

Resources ComplianceProductivity

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entities carried out a risk inventory and recorded and assessed focus risks and other risks in the reporting system. The processes already in place were continued in 2015, undergoing rolling improvements and adjustments in line with changing internal and external requirements.

Major risks that can be insured on an economically reasonable scale are covered by master programs for all Group entities wherever possible. We work with credit insurers, for example, where it makes financial sense to do so. In addition, receivables from customers are monitored by an extensive receivable management system, also at the Group level. Individual financial service providers are associated with a heightened risk of default. We counter this risk through a strict credit verification procedure and appropriate insurance for our investment. Although collection days increased slightly in 2015 in comparison to 2014, they are at a very good low level overall. This highlights that our risk in this area is relatively low and that the existing processes and systems are effective. We do, however, see ourselves faced with increasing difficulties in Germany as a result of court decisions in insolvency cases, which grant insolvency administrators extensive opportunities for reimbursement if we have supported our customers in the past with generous payment terms. In 2015, however, we were also able to take out an insurance policy to protect us against unforeseeable risks in this area. Overall insurance coverage is managed centrally.

The Central Managing Board has identified potential risks that could have a negative impact on the net assets, financial position and results of operations of the company in the following risk areas, sorted by descending relevance:

Economic environmentThrough our global purchasing and sales activities, we have a high natural diversification of risk and a decreased dependency on neg-ative economic developments in individual countries, with more than 80 percent of our sales being generated in Europe. This means that we are hit particularly hard by economic fluctuations in the euro area. Our companies in Southern Europe, particularly in Italy, Greece and Turkey, are exposed to an increased risk, although this situation turned around last year. We have identified further risks in the political devel-opment of Eastern European markets, the increased global risk posed by IS terrorism and the marked increase in immigration to Europe with the associated economic and social challenges. We nevertheless

believe that immigration, in particular, also offers advantages for the labor market and on the demand side for our customers and, as a result, for the Würth Group.

Most of the financial risks of the Würth Group are measured, monitored and managed centrally by Würth Finance International B.V. In order to ensure that the Würth Group is solvent at all times without restriction, the Würth Group has sufficent cash and cash equivalents at its disposal and, thanks to its “A rating” from Standard & Poor’s, excellent access to the public and private capital markets to procure further financial resources. There are therefore no liquidity risks for the Würth Group at present. In addition to the existing liquidity, the Würth Group had a contractually agreed, unused credit line of EUR 200 million at the end of 2015, which expires in February 2018. According to the latest liquidity plans, the Würth Group will not need to draw on this credit line in 2016 either. Any risks arising from derivative financial instruments are accounted for. At the time this management report was prepared, there was no indication of any specific counterparty risks, which are auto-matically monitored on a daily basis. In 2011, a CSA (Credit Support Annex) was concluded with the main counterparties to derivatives, thus further reducing counterparty risk. Cluster risks are avoided by internal deposit limits for individual banks. For a description of deriva-tives and associated risks, please refer to the notes on the consolidated financial statements under: I. “Other notes”, [4] “Financial instruments”.

ProductivityEvery year, the Würth Group invests an amount running into the mid triple-digit million range to secure its planned sales growth and further expand its market shares in individual regions / market areas. As a result, any deviations from the planned route require a timely response, with targeted measures to counteract such developments. These measures include management using key productivity figures, the in-depth analysis of loss-making companies, a detailed, multi-stage investment controlling process, scenario calculations and a firm focus on achieving the targeted operating results. As a general rule, we take care to ensure that sales and gross profit grow faster than personnel expenses – in line with one of the Würth Group’s fundamental princi-ples: “Growth without profit is fatal”.

IT structuresDue to the decentralized organizational structure of the Würth Group, with a large number of companies, IT risks are a particular challenge.

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We have launched various IT projects and initiatives so that we can rise to this challenge.

Centralization of IT structures The establishment of Würth IT in Germany and India further consolidated the IT activities of the Würth Group in 2015. In addition to these two companies, there is also Würth ITensis in Switzerland, Würth Phoenix in Italy and the Comgroup in China. This has given Würth the profile it needs to be able to compete on the market as an attractive employer in the IT sec-tor. The construction of a central data center for the Würth Group in Waldzimmern adds to the existing cluster of data centers. This means that the range of services offered by the central IT service to date has been expanded to include an infrastructure comprising several security mechanisms. More than 600 employees at these IT companies act as service providers and partners for the Würth Group companies and for our customers outside of the Würth Group.

IT standardization The centralization of the IT companies and the corresponding specialization means that a range of different system components is now available. A roll-out plan sets out the launch dates at the individual companies, with numerous roll-out teams working on the introduction of the components in question in parallel to ensure a broad multiplication platform for the applications, processes and functions in question.

The roll-outs will make existing processes more uniform, efficient, transparent and faster. This will allow the individual companies to respond to the rising demand for individual ordering and delivery services among our customers. Significant efficiency gains can still be achieved, as the standardization of the IT structures through central development will result in economies of scale.

The Würth Group’s IT service has proven its ability to perform in line with the very highest standards. The uniform system platform will allow further developments to be made available to all companies working on the platform in question within a very short period of time.

IT security The security of the IT systems is reviewed by means of IT checks at the Group entities in accordance with a plan coordinated with the Central Managing Board of the Würth Group. We analyze the potential threat that cyber risks pose. We combat the resulting risks by taking organizational and technical measures and also by transfer-

ring risks that can be insured to external risk carriers, such as insurers. All measures relating to data security and IT risks are taken in cooper-ation with our data security officer, who has Group-wide responsibility. In addition, Würth has since introduced an IT Compliance Code of Conduct. The centralization of the IT systems also allows far-reaching and multi-level security procedures to be implemented, on the one hand at the physical level, e.g. in the data centers, and on the other at the logistical level, e.g. the various system and program components.

Human resourcesStaff turnover, particularly among our sales force employees, remains a focal point. This is documented and analyzed across all hierarchy levels for every entity of the Würth Group. Regular employee surveys conducted by independent institutions and the monthly monitoring of staff turnover are key instruments allowing us to identify unfavorable developments, analyze their impact on staff recruitment processes, customer loyalty and training programs and combat these effects using targeted measures. The overall staff turnover rate of the Würth Group remains at a very encouraging low level at well below the 20 percent mark. The lack of specialist employees to work as members of the in-house staff or the sales force is another challenge for HR management. In Germany, it is also becoming increasingly difficult to find university graduates and skilled trainees. This prompted us to further expand the measures offered by the Würth Business Academy when it comes to managing young talent and training management employees in 2015. Up-and-coming management talents undergo development measures to prepare them for various levels of manage-ment within the Würth Group via the MC Würth, High Potential and Top Potential management training programs. These programs give employees targeted training that is tailored to suit their own individual ambitions and skills in order to prepare them for further management duties within the Group. The international management seminars, as well as international specialist seminars on issues such as product management, procurement and finance, are organized and coordi-nated by the Würth Business Academy.

Compliance risksRisks from the regulatory environment are becoming more and more important for us as a global player. There is no question that we aim to observe and comply with all rules and regulations for our business, both nationally and internationally. These include, among others, reg-ulations on how to deal with employees, competitors, suppliers, data

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and the authorities. We do not tolerate the use of country-specific or sector-specific practices to the contrary, and we communicate this every year using our compliance reporting system. In 2015, a roll-out plan was developed for the implementation of a company-wide compliance system. The steps to be taken in 2016 include: the further specification of the content and corresponding systems, adjustments to reflect existing structures, as well as communications and training.

National and international transactions involving goods, services, payments, capital, technology, software and other types of intellectual property are subject to numerous regulations and limitations that also have to be observed by the companies in the Würth Group. In 2014, the system for checking compliance with these regulations was strengthened by the introduction of internal guidelines and the appointment of a team of experts. What is more, checking systems are being introduced for control purposes at a growing number of com-panies. These systems are also, for example, part of the standardized Würth Line IT system (Würth System One). Due to the increasing com-plexity of tax law, we have in-house experts and consult renowned external consultants on a case-by-case basis. Particularly in emerging markets like Brazil, for example, complex, inconsistent and constantly changing legal principles pose a challenge and also create risks that are difficult to assess and will persist in the long term due to the possi-bility of retroactive effects.

Business modelThe business model of direct selling still offers considerable oppor-tunities for the Würth Group in that it places us very close to the market and ensures customer loyalty. Nevertheless, customer ordering behavior has changed considerably in recent years. The Internet offers a whole host of opportunities for working directly with suppliers. This is resulting in growing competitive pressure given the relative ease with which businesses can establish Internet-based business models. Our business model has to adapt to reflect this development. We want direct sales to continue to play a key role but also want issues such as logistics and a broad product range to enjoy market opportunities. Nowadays, sales representatives are more than just salespeople. They are managers of various different customer contact points: the external sales force, branch offices and the Internet. We are taking various different measures to support this development, including the introduction of innovative e-business tools.

Opportunities

The opportunities set out below could have a positive impact on net assets, financial position and results of operations. The opportunities are also listed in decreasing order of relevance.

Decentralized structureWürth’s decentralized structure is a great advantage for the Group, especially in light of the fact that the individual countries in which we operate display such variation in their economic development. We believe that this structure presents an opportunity for future growth. It allows a quick local response to circumstances and changes in any given market environment, meaning that we can implement efficient measures. We will continue to push the development of the Würth Group while maintaining our decentralized structure. The term “decen-tralized”, within this context, does not just refer to regional aspects, but also covers the large number of our different business models. How-ever, the fact that we pursue the principle of decentralization does not mean that we cannot standardize processes where it makes sense to do so in order to make better use of our resources.

Market penetrationOur global share of the market is estimated at just five percent due to a low share of the market in most countries, with a few exceptions. What would appear to be a disadvantage actually signals huge growth potential that we can still tap into by further expanding our customer base and intensifying our customer relationships, for exam-ple by continually enhancing intelligent distribution systems that offer real benefits to our customers.

Customer relationsMore than three million customers form the basis for our business success. As a result, expanding and maintaining our customer relations are key components of our day-to-day working life. We will continue to focus on very intensive customer management at all Group com-panies. 300,000 customer contacts a day and a large number of long-standing relationships between our customers and our 31,000 sales representatives help us to exploit the existing customer poten-tial to the greatest extent possible. Grouping our customers based on their individual needs is a key steering mechanism for strategic management. Our motto is: “To each customer their own Würth”. The relationship between customer wins and sales growth as well as

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tation. The training initiative in quality management was designed and launched in 2012 and has continually been expanded further since then. While the primary target group comprises employees from quality assurance, the basic seminars also target employees from other rele-vant functional areas, e.g. purchasing. A total of 66 more employees received training on the topic of quality on 228 seminar days in 2015.

Mergers & AcquisitionsSustainable and profitable sales growth is one of the key objectives pursued by the Würth Group. The Würth Group establishes subsidiar-ies to spread successful business models and sales concepts in new markets. In addition to setting up companies and achieving growth via additional divisions and branch offices of existing companies, part of the company’s strategy also involves making targeted acquisi-tions. We want to use these acquisitions to further expand the Würth Group’s current global presence in other regions, or to complement it from a strategic angle, as well as to refine the Würth Group’s global profile. In 2015, we successfully achieved this objective by acquiring companies in North America and Southern Europe, in particular. Our international standing, earnings power and corporate culture make us an attractive partner for potential sellers.

Overall assessment

The risks for the Würth Group are limited by the functioning risk manage ment system that is in place. Existing risks are consistently monitored and assigned measures to ensure that they do not jeopar-dize the Würth Group’s continued prosperity. We are currently not aware of any such risks. The existing opportunities will enable us to continue to growing profitably in 2016 and in the subsequent years.

the service degree are important indicators of business success for us. Customer insolvencies are therefore a manageable risk for the Würth Group. Thanks to our very extensive core range of 125,000 products, the comparatively low average order values and the broad customer base, we are well placed to keep the risks low.

QualityIt is the proclaimed aim of the Würth Group to meet, or where possi-ble exceed, the highest quality standards. For this reason, the guiding principle “Würth is quality – everywhere, every time” was anchored in the Würth Group’s quality management in 2010 and consistently developed further in the period from 2011 to 2015. The brand promise made by this principle applies for all of our markets, and its implemen-tation opens up important additional market opportunities. This is true both of customers in the professional trades and those in industry. For us, ensuring reliable compliance with standards, as well as product requirements and approval criteria is a fundamental quality manage-ment task to enable us to be a dependable partner for our customers. This is important, but we do not consider it enough in itself: we strive to surpass customer expectations wherever possible with our services and inspire our customers in the process.

In the 2015 fiscal year, the Würth Group’s central quality team con-tinued its activities. Quality manager networks were promoted within the units and divisions, and our quality policy and current “Quality – Productivity” strategy were communicated and discussed. In coop-eration with Akademie Würth, we have developed our own training program for this purpose, known as “Würth process management system”. Würth Quality Risk Company Assessments (QRCA), which identify strengths and room for improvement and derive measures for the future, had already been conducted 269 times by the end of 2015. The management of the respective entity directly implements the findings in specific process enhancements that sharpen quality consciousness. The measures prioritize customer interfaces (contract review, sales support), complaints management, warehouse batch management, quality assurance and supplier management, with addi-tional employees being hired in this area, too.

An important component remains the validation of future products by Adolf Würth GmbH & Co. KG and Würth International AG and the systematic testing of incoming goods. The Würth Group has its own testing labs worldwide, three of which now have ISO 17025 accredi-

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Employees

• Number of employees rises to 68,978 worldwide• Further enhancement of development programs

within the Group• Expansion of health management program

Workforce developmentThe number of employees in the Würth Group had risen by 4.4 per-cent to 68,978 by the end of 2015 (2014: 66,044). In Germany, the Würth Group had 21,145 employees on the payroll (2014: 20,226), while the Würth companies abroad reported 47,833 employees (2014: 45,818). There were 31,080 employees working as permanent sales representatives worldwide in fiscal year 2015 (2014: 29,923). 1,308 employees joined us in connection with acquisitions.

HR strategyDemographic change, the globalization of the labor market and rising competitive pressure mean that there is greater competition

for qualified staff. Extending our radius when recruiting staff for the Würth Group looking to other regions, for example abroad, is the logical consequence. At the same time, the opportunities we offer for working abroad and, as a result, the Group’s inter national structure, are attracting growing interest from applicants. Our HR activities focus on bundling the resulting synergy effects in international collaboration and employee networking within the Würth Group. Scenarios in which employees change companies within the Group, for example due to their career development, the identification of up-and-coming young talent or relocations for family-related reasons call for a central HR administration team that is available internation-ally to the individual companies in the Group. The Würth Group uses international HR files presenting clear and meaningful employee qualifications in order to categorize employees systematically based on their flexibility, mobility and quality. The aim is to ensure the transparent presentation of all HR policy measures relating to talent management for the Group and to make a large number of additional services available to HR departments across the globe.

EMPLOYEESWürth Group as of December 31

60,000

40,000

20,000

2006

54,90629,020

2007

63,69930,650

2008

62,81130,831

2009

57,88228,613

2010

62,43330,410

Employees, thereof

Sales representatives

2011 2012 2013 2014

66,113 65,169 63,57166,044

32,449 30,790 29,15729,923

80,000

2015

68,97831,080

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and its AZAV (Accreditation and Approval for Employment Promotion) certificate, Akademie Würth has been accredited as an educational institute by the regional authorities in Karlsruhe in accordance with the Self-Improvement Act of the Federal State of Baden-Württemberg (BzG BW).

Academic degreesTraining programs for working professionals at the Akademie Würth Business School, which are open both to employees of the Group and to interested individuals from outside of the Group, allow people to study for academic degrees after completing their initial vocational training. These include the Business Administration B.A. in cooperation with the Distance Learning University in Hamburg, a three-and-a-half year program. In collaboration with the University of Louisville in Ken-tucky (USA), Würth has been offering the Master’s course in Global Business since 2002. The one-year program, which is conducted in the English language, awards graduates a Master of Business Admin-istration (MBA).

The Akademie Würth Business School is also stepping up its collab-oration with the Heilbronn Institute for Lifelong Learning (HILL), part of the Heilbronn University in Germany: This will allow the Business School to raise its profile in the Heilbronn-Franconia region and to send out a further signal, emphasizing the solidarity between the Group and the headquarters.

Career development The Würth Group recruits most of its managers from within the Com-pany. We have established various development programs within the Group to ensure holistic management training processes and the systematic development of up-and-coming talents.

The Würth Group offers the following programs:› The MC Würth program prepares employees for middle manage-

ment positions. 364 up-and-coming management staff took part in 2015.

› The High Potential program supports managers on their way to upper management levels. 111 specialists and executives took part in 2015.

› The Top Potential program prepares select managers for positions in the highest echelons of corporate management over a two to three-year period. 52 managers were in the program in 2015.

Promoting the future talentAs a family business, Würth is committed to long-term corporate devel-opment. This also applies when it comes to promoting the talent of the future. In Germany, where there is a long tradition of dual training con-cepts, Würth has been committed to providing people just embarking on their careers with extensive initial training for more than 60 years now. At the end of 2015, the Würth Group in Germany employed 1,155 trainees for more than 50 occupations. Young professionals can also study for Bachelor’s degrees at the Baden-Württemberg Cooperative State University. Around one third of Würth trainees make use of this opportunity. Commercial and technical occupations and catering traineeships form training focal points within the German companies.

Employee trainingThere are various phases in each employee’s working life: periods focusing on personal issues such as self-worth and confidence, or on an employee’s professional career and periods in which specialist topics are just as important as intrinsic values. In Germany, Akademie Würth offers employees a development-oriented program that allows them to progress in these very areas: The program covers management, leadership and commercial or technical matters, as well as training courses dealing with interpersonal and social skills, work methods, IT applications and foreign languages.

Akademie Würth as an independent educational instituteGuided by the motto “Retaining and developing staff to make them successful”, Akademie Würth is expanding its range of holistic and sustainable development courses for specialists and managers to include courses that are also available to interested individuals from outside of the Group: Würth employees can access a broad range of seminars covering topics from IT to working techniques and communi-cation. In the craftsman center, our customers’ employees can access numerous seminars on both technical and commercial topics. The Akademie Würth Business School even allows interested individuals from outside of Würth to study alongside their job. Akademie Würth aims to use this varied range of training and development programs to establish itself as an innovation leader and educational companion on the open education market. Akademie Würth has proven what it is capable of with decades of experience and a highly qualified pool of trainers and consultants. In addition to its existing certificate awarded by the German Association for Technical Inspection (TÜV)

77

Career workshopIn order to establish forward-looking training and development and to secure the next generation of managers within the Group, Akademie Würth has set up the “career workshop” (Karrierewerk) for the Ger-man companies – a basic qualification for all further career programs. The career workshop is aimed at the lower management level and is designed to provide employees with guidance and training so that they can identify their further development potential. The program is split into management and specialist responsibilities, also offering advanced modules for employees who already have experience in their areas of responsibility and want to deepen this experience.In addition to providing networking opportunities for employees from various companies, the career workshop plays a key role in promoting the management philosophy and, as a result, the corporate culture of the Würth Group.

Health managementIn order to consolidate all health promotion measures, the “Fit with Würth” company health management program launched by Adolf Würth GmbH & Co. KG has set up a cycle of quarterly working groups. Around 1,000 employees, their family members and retired employees attend more than 300 courses. The health management program covers fitness, nutrition, safety, social affairs, preventative health and well-being. Employees trained as “health navigators” invite employees to take an active break within their departments. In line with a suggestion made by employees working in the distribution center, the “fitness corners” pilot project offers employees the oppor-tunity to train independently within the logistics departments and allows them to strike a healthy balance between physical activity and their daily work. A small group course conducted by physiotherapists on a weekly basis allows employees to receive individual, guided training that aims to improve their general physical and muscular condition. In order to make sure that our health promotion measures also reach our colleagues working as members of the sales force and at our branch offices, the “Fit with Würth” team uses conferences as an opportunity to conduct ergonomic consultancy sessions in the car, for example.

Employee surveyEmployee satisfaction has always been a top priority for the Würth Group. Only satisfied employees can be good employees. They secure the company’s competitive standing and, as a result, help to secure jobs. The Würth Group has been conducting a standardized,

regular employee survey since 2005. This results in structured informa-tion allowing comparisons to be drawn and used to improve employee well-being and processes in general. The Group-wide survey provides a benchmark both for and between individual companies in the Würth Group. The survey is carried out together with the Mannheim-based WO Institute (Institute for Economic and Organizational Psychology). 170 companies within the Würth Group now take part in the survey. The companies are free to decide how often they conduct the survey – it is generally conducted every two years.

Thanks to our employees2015 was a landmark year for Würth: Reinhold Würth celebrated his 80th birthday, while Adolf Würth GmbH & Co. KG marked its 70th anniversary. These two events prove that, as a family business, Würth relies on the individuals who have worked to turn a two-man business in Künzelsau into a global corporation over the past seven decades. The Central Managing Board of the Würth Group would like to thank all employees for rising to the challenges that have presented themselves, making the most of their scope for action and using their creative ideas to turn sketches into plans and drafts into results. It is precisely this consolidated strength of 69,000 people and this enthusi-asm that determines the architecture of the Würth Group and came to the fore at the celebrations held in 2015.

We would also like to thank the employee representatives within the Würth companies. Open and honest dialogue forms the backbone of successful and constructive collaboration.

78


Corporate governance report

Corporate governance provides rules and standards for good and responsible management and monitoring of companies. Rules, codes of conduct, and standards for management and monitoring functions within the Würth Group are shaped by the corporate philosophy and culture.

The corporate philosophy shaped and defined by Prof. Dr. h. c. mult. Reinhold Würth determines the credo and self-image of the Würth Group. Together with corporate ethics, the corporate culture deals with the values and standards that should underlie entrepreneurial actions and decisions as well as the behavior of people working together. Würth’s corporate culture is shaped by concepts such as dynamism, performance orientation, openness, honesty, reliability and responsibility.

Corporate governance in the Würth Group is ensured by the following rules and systems:

› A written corporate constitution laying down all the rules of inter-action between the company, the Advisory Board and the owners, the Würth Family Trusts

› A dual management system, i.e. segregation of functions for oper-ating management and supervisory bodies, with the Central Man-aging Board and Advisory Board comparable to the Management Board and Supervisory Board, respectively, of a stock corporation

› Internal Audit Department› Audit of significant separate financial statements and the consoli-

dated financial statements by independent auditors› Establishment of risk management and risk controlling systems› Refined controlling methods to create transparency in operating units› Rating of the Würth Group by an international rating agency

In addition to these regulations and measures, the Central Managing Board of the Würth Group follows the current development of the German Corporate Governance Code (GCGC) and the German Code for Family Businesses. It adheres to these codes wherever the regulations are applicable to the Würth Group. Below are some further examples of corporate governance measures in addition to those described above:

› Examination of efficiency on the Advisory Board of the Würth Group pursuant to No. 5.6 GCGC

› Establishment of committees within the Advisory Board of the Würth Group, e.g. the audit committee pursuant to No. 5.3.2 GCGC

› Clear division of responsibilities between the bodies of the Würth Group by way of a binding approval catalog for management measures

› Performance-related payment of top management with variable and fixed salary components pursuant to No. 4.2.3 GCGC; appro-priateness of total remuneration is borne in mind and a cap on sev-erance packages has been arranged.

A further component of corporate governance is compliance on the part of the employees. With 69,000 employees, the Würth Group needs clear rules to determine its conduct or the framework for entre-preneurial decisions. This is particularly relevant in light of the fact that the Würth Group’s activities span more than 80 countries.

We need to set out binding standards and rules of conduct without infringing the laws and values prevailing in various countries and cul-tures. On the basis of the corporate philosophy and corporate culture described, Würth’s Policy And Procedure (PAP) manual sets out a code of conduct to guide executives and employees with respect to the behavior and actions expected of them within the company and in relation to its environment.

79

Subsequent events

For information on the events after the balance sheet date, refer to the comments in the notes on the consolidated financial statements under [10] “Events after the reporting period” in I. “Other notes”:

Outlook

Overall economic environment Global GDP is expected to grow by 3.3 percent year-on-year in 2016, 0.3 percentage points more than in 2015 (+ 3.0 percent).

The economic situation in the euro area, the region in which the Würth Group’s sales are focused, continued to recover in 2015. The forecasts for 2016 point towards a similar economic situation to that witnessed in 2015. Economic growth is expected to come in at 1.7 percent in the euro area in 2016 (2015: + 1.6 percent). The Italian economy bounced back for the first time in 2015 after a prolonged slump (+ 0.8 percent). This development was driven primarily by rising export demand due to the weak euro, which is expected to result in GDP growth in the amount of 1.4 percent in 2016. The Spanish economy will remain at a relatively high level in 2016: GDP growth of 2.8 percent is expected this year (2015: + 3.2 percent). After GDP in the UK contracted by 0.6 percentage points to 2.3 percent in 2015, 2016 is not expected to bring any increase in economic growth either. Gross Domestic Product is expected to slip by a further 0.2 percentage points to 2.1 percent. In France, GDP is expected to increase slightly this year by 0.2 percentage points to 1.3 percent (2015: + 1.1 percent), with Portugal expected to achieve GDP growth of 1.6 percent in 2016 (2015: + 1.5 percent). The economic situation in Russia will show a slight recovery again in 2016: Gross Domestic Product is only expected to contract by 1.2 percent after it fell by 3.7 percent in 2015.

In Germany, the Würth Group’s largest sales market, the economy remains on track – Gross Domestic Product is expected to increase by 1.8 percent (2015: + 1.7 percent).

The US economy failed to live up to the forecast of 3.6 percent growth in 2015, with GDP increasing by only 2.5 percent instead. The forecast for 2016 is the same: The US is expected to achieve GDP growth of 2.7 percent. As far as Latin America is concerned, 2016 is expected to bring GDP growth of 0.1 percent (2015: –0.6 percent). The emerging

markets of China and India, which are very important to the Würth Group, will remain global growth drivers. Although China looks set to lose some momentum compared with last year (2015: + 6.9 percent), economic growth is likely to remain at a high level of 6.5 percent in 2016. The outlook for India is also positive, with a growth forecast of 7.4 percent for 2016 (2015: + 7.2 percent).

Development of the Würth Group

• Aim to boost the operating result to EUR 580 million• Expansion of the branch office network at established

companies• Mid-term focus on a balance between e-business and

sales representatives

The Würth Group achieved a new sales record of EUR 11 billion in 2015. Our operating result is up slightly in a year-on-year compar-ison to EUR 525 million. This is good news. But we want to do even better. This is the challenge we aim to rise to as we look ahead to 2016 with a sense of optimism and ambition.

Our focus will be on striking a balance between e-business, sales gen-erated by our branch offices and direct sales. The partnership we enjoy with our customers, personal contact, dialogue and personal rela-tionships continue to define what we understand to be a successful customer relationship. This is why – as well as investing in e-business – we made considerable investments in expanding our sales force and branch office network at the established Würth companies in 2015. We employed more than 1,000 additional sales representatives within the Group and opened 82 new branch offices worldwide. E-business is becoming increasingly important within the Würth Group. Online shops, customer Apps for mobile devices and scanner-supported ordering systems are being used more and more by companies to exploit the opportunities that the changes in the communication habits of our customers bring. This means that e-procurement is becoming increasingly important, with streamlined procurement processes and the digital exchange of information helping to optimize business pro-cesses. The Würth Group is systematically exploiting the opportunities that come hand-in-hand with digitalization to expand its entire e-busi-ness segment. As a result, e-business – together with the multiplication of our branch offices – is a key component in the process of change that will transform us into a multi-channel sales company.

80


The rapid pace of change, the high speed on the markets and our increasingly mobile societies are more controversial than ever before. What we have to do is retain a sense of balance and provide familiar products where familiar products are what the customer wants, while at the same time having responses ready to any new trends that emerge.

In 2015, a groundbreaking ceremony for the new convention center, the Carmen Würth Forum, took place on the premises of the parent company. This is testimony to our commitment to the place were the Group’s parent company, Adolf Würth GmbH & Co. KG, has its home, the Hohenlohe region, and serves as a beacon of the Group’s positive basic philosophy and forward thinking. If we look at the image of this new building within the context of the celebrations to mark the 70th anniversary of Adolf Würth GmbH & Co. KG and the 80th birth-day of Professor Reinhold Würth in 2015, we get a three- dimensional impression of the sustainable energy that has been invested in values that have developed over time. For us, this awareness provides us with a healthy basis, the glucose that we convert directly into per-formance together with our employees: into the optimization of our products, their quality, our service. Because partnerships always take place in the analog world.

Overall statement on the future development of the Würth Group:In the 2016 fiscal year, the Würth Group is aiming to achieve sales of EUR 11.8 billion and an operating result of more than EUR 580 mil-lion. As far as gross profit is concerned, we expect this key figure to remain constant although we expect this to prove a challenge. We predict a slight positive development in collection days, stock turnover and staff turnover. All of these statements are subject to the proviso that innovation, employment and global economic growth continue to show positive development.

81

CONSOLIDATED FINANCIAL STATEMENTS

82 CONSOLIDATED INCOME STATEMENT

83 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

84 CONSOLIDATED STATEMENT OF FINANCIAL POSITION

86 CONSOLIDATED STATEMENT OF CASH FLOWS

88 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

89 CONSOLIDATED VALUE ADDED STATEMENT

90 NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS

90 A. General information 90 B. Adoption of International

Financial Reporting Standards 97 C. Consolidated group 100 D. Consolidation principles 101 E. Foreign currency translation 102 F. Accounting policies 110 G. Notes on the consolidated

income statement 114 H. Notes on the consolidated

statementoffinancialposition 142 I. Other notes 153 J. Notes on the consolidated

statementofcashflows 154 K. List of shareholdings 168 L. The boards

171 AUDIT OPINION OF THE INDEPENDENT AUDITOR

82


CONSOLIDATED INCOME STATEMENT

in millions of EUR 2015Share

% 2014Share

%Change

%Sales [1] 11,046.8 100.0 10,126.4 100.0 9.1Changes in inventories 9.5 0.1 1.9 0.0 > 100Ownworkcapitalized 17.0 0.1 17.1 0.2 – 0.6Cost of materials [2] 5,423.4 49.1 4,865.5 48.1 11.5Costoffinancialservices [3] 38.3 0.3 34.6 0.3 10.7

5,611.6 50.8 5,245.3 51.8 7.0

Other operating income [4] 177.6 1.6 83.0 0.8 > 100Personnel expenses [5] 3,092.0 28.0 2,845.5 28.1 8.7Amortizationanddepreciation 331.5 3.0 277.7 2.7 19.4Other operating expenses [6] 1,794.2 16.2 1,651.4 16.3 8.6Finance revenue [7] 39.5 0.4 42.5 0.4 – 7.1Finance costs [7] 95.0 0.9 96.2 1.0 – 1.2Earnings before taxes [8] 516.0 4.7 500.0 4.9 3.2Income taxes [9] 81.8 0.8 122.5 1.2 – 33.2Net income for the year 434.2 3.9 377.5 3.7 15.0

Attributable to:OwnersofparentcompaniesintheGroup 419.6 3.8 361.8 3.6 16.0Non-controlling interests 14.6 0.1 15.7 0.1 – 7.6

434.2 3.9 377.5 3.7 15.0

83

in millions of EUR 2015Share

% 2014Share

%Change

%

Net income for the year 434.2 100.0 377.5 100.0 15.0Items that are not reclassified to profit or lossRemeasurementofdefinedbenefitplans [25] 6.6 1.1 – 57.4 – 15.2 < 100Taxes attributable to other comprehensive income – 0.7 0.3 11.8 3.1 – 89.0Items that may be reclassified to profit or loss in certain circumstancesForeign currency translation 21.6 5.0 18.7 5.0 15.5Other comprehensive income 27.5 6.3 – 26.9 – 7.1 < 100Total comprehensive income 461.7 106.3 350.6 92.9 31.7

Attributable to: OwnersofparentcompaniesintheGroup 446.4 102.8 335.3 88.8 33.2Non-controlling interests 15.3 3.5 15.3 4.1 – 0.7

461.7 106.3 350.6 92.9 31.7

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

84


CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Assetsin millions of EUR 2015

Share % 2014

Share %

Change %

Non-current assetsIntangibleassetsincludinggoodwill [10] 608.4 6.6 211.0 2.6 > 100Property, plant and equipment [11] 2,733.4 29.7 2,508.0 30.8 9.0Financial assets [12] 48.2 0.5 53.5 0.7 – 9.9Receivablesfromfinancialservices [13] 704.5 7.6 707.6 8.7 – 0.4Otherfinancialassets [18] 14.0 0.2 17.4 0.2 – 19.5Other assets [19] 28.7 0.3 27.2 0.3 5.5Deferred taxes [14] 136.8 1.5 125.8 1.5 8.7

4,274.0 46.4 3,650.5 44.8 17.1

Current assetsInventories [15] 1,653.4 18.0 1,462.1 18.0 13.1Trade receivables [16] 1,427.2 15.5 1,266.7 15.6 12.7Receivablesfromfinancialservices [13] 735.5 8.0 704.6 8.6 4.4Income tax receivables [17] 54.3 0.6 33.7 0.4 61.1Otherfinancialassets [18] 154.2 1.7 161.2 2.0 – 4.3Other assets [19] 157.9 1.7 129.7 1.6 21.7Securities [20] 137.4 1.4 131.4 1.6 4.6Cash and cash equivalents [21] 615.9 6.7 601.6 7.4 2.4

4,935.8 53.6 4,491.0 55.2 9.9

9,209.8 100.0 8,141.5 100.0 13.1

85

Equity and liabilities in millions of EUR 2015

Share % 2014

Share %

Change %

EquityEquity attributable to parent companies in the Group [22]

Share capital 408.4 4.4 395.2 4.9 3.3Reserves 1,678.1 18.2 1,518.3 18.6 10.5Retained earnings 1,889.2 20.5 1,698.2 20.8 11.2

3,975.7 43.1 3,611.7 44.3 10.1Non-controlling interests 107.0 1.2 71.3 0.9 50.1

4,082.7 44.3 3,683.0 45.2 10.9

Non-current liabilitiesLiabilitiesfromfinancialservices [23] 348.3 3.8 251.9 3.1 38.3Financial liabilities [24] 1,728.4 18.8 1,284.3 15.7 34.6Obligationsfrompost-employmentbenefits [25] 248.7 2.7 244.8 3.0 1.6Provisions [26] 93.3 1.0 87.5 1.1 6.6Otherfinancialliabilities [27] 105.7 1.2 6.1 0.1 > 100Other liabilities [28] 4.2 0.0 5.0 0.1 – 16.0Deferred taxes [14] 141.2 1.5 98.8 1.2 42.9

2,669.8 29.0 1,978.4 24.3 34.9

Current liabilitiesTrade payables 553.5 6.0 477.5 5.8 15.9Liabilitiesfromfinancialservices [23] 826.5 9.0 877.3 10.8 – 5.8Financial liabilities [24] 166.1 1.8 289.4 3.5 – 42.6Income tax liabilities 28.2 0.3 38.8 0.5 – 27.3Provisions [26] 147.7 1.6 143.6 1.8 2.9Otherfinancialliabilities [27] 364.5 4.0 314.4 3.9 15.9Other liabilities [28] 370.8 4.0 339.1 4.2 9.3

2,457.3 26.7 2,480.1 30.5 – 0.9

9,209.8 100.0 8,141.5 100.0 13.1

86


CONSOLIDATED STATEMENT OF CASH FLOWS*

Cash flow from operating activitiesin millions of EUR 2015 2014Earnings before taxes 516.0 500.0

Income taxes paid – 118.8 – 94.7Finance costs 95.0 96.2Finance revenue – 39.5 – 42.5Interest income from operating activities 17.2 22.0Interest payments from operating activities – 12.4 – 11.3Changesinobligationsfrompost-employmentbenefits 2.6 – 6.5Amortization,depreciationandimpairmentlosses/reversalsofimpairment 327.9 276.0Losses on the disposal of non-current assets 3.4 2.9Gains on the disposal of non-current assets – 6.2 – 7.4Insurance settlements for investments – 39.4 0.0Other non-cash income and expenses 39.2 61.4Gross cash flow 785.0 796.1

Changes in inventories – 114.5 – 127.1Changes in trade receivables – 103.8 – 62.0Changesinreceivablesfromfinancialservices – 22.0 – 7.4Changes in trade payables 24.3 26.0Changesinliabilitiesfromfinancialservices 44.4 – 22.2Changes in short-term securities – 6.0 – 14.2Changesinothernetworkingcapital 22.3 23.0Cash flow from operating activities 629.7 612.2

Investments in intangible assets – 33.8 – 40.6Investments in property, plant and equipment – 471.4 – 303.9Investmentsinfinancialassets – 3.6 – 10.4Investmentsinnewlyacquiredsubsidiarieslesscash** – 247.0 – 26.5Inflowoffundsfrominsurancesettlements 39.4 0.0Cash received from the disposal of assets 33.8 30.1Cash flow from investing activities – 682.6 – 351.3

87

Cash flowsin millions of EUR 2015 2014Distributions – 254.8 – 213.5Changesinreceivablesfrom/liabilitiestoFamilyTrustsand the Würth family including interest income 18.9 1.9Capital contribution 164.7 147.5Increaseinfinancialliabilities 554.8 63.3Decreaseinfinancialliabilities – 369.0 – 347.2Interestpayments/incomefromfinancingactivities – 46.8 – 61.3Increase/decreaseinmajorityshareholdings 0.0 – 1.5Cash flow from financing activities 67.8 – 410.8Changes due to consolidation – 0.6 2.3Changes in cash and cash equivalents 14.3 – 147.6

Composition of cash and cash equivalentsin millions of EUR 2015 2014

Change in millions of EUR

Short-term investments 0.8 0.3 0.5Other cash equivalents 5.7 4.1 1.6Cash on hand 2.5 2.3 0.2Bankbalances 606.9 594.9 12.0Cash and cash equivalents 615.9 601.6 14.3

*Referenceto“J.Notesontheconsolidatedstatementofcashflows”**Referenceto“C.Consolidatedgroup”

88


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Equity attributable to parent companies in the GroupReserves

in millions of EURShare

capitalRetained earnings Total

Non- controlling

interestsTotal

equity

Differencesfrom

currency translation

Other reserves

January 1, 2014 372.4 – 96.6 1,467.1 1,592.2 3,335.1 63.4 3,398.5Net income for the year 0.0 0.0 0.0 361.8 361.8 15.7 377.5Other comprehensive income 0.0 18.7 – 45.1 0.0 – 26.4 – 0.5 – 26.9Total comprehensive income 0.0 18.7 – 45.1 361.8 335.4 15.2 350.6Capitalincrease/reduction 22.8 0.0 124.6 0.0 147.4 0.1 147.5Transferto/drawingsfromreserves 0.0 0.0 48.6 – 48.6 0.0 0.0 0.0Distributions 0.0 0.0 0.0 – 207.1 – 207.1 – 6.4 – 213.5Acquisitionofmajorityshareholdings 0.0 0.0 1.0 0.0 1.0 – 2.5 – 1.5Otherincomeandexpenserecognized in equity

0.0

0.2

– 0.2

– 0.1

– 0.1

1.5

1.4

December 31, 2014 395.2 – 77.7 1,596.0 1,698.2 3,611.7 71.3 3,683.0Net income for the year 0.0 0.0 0.0 419.6 419.6 14.6 434.2Other comprehensive income 0.0 21.6 5.2 0.0 26.8 0.7 27.5Total comprehensive income 0.0 21.6 5.2 419.6 446.4 15.3 461.7Capitalincrease/reduction 13.0 0.0 151.5 0.0 164.5 0.2 164.7Transferto/drawingsfromreserves 0.0 0.0 – 17.8 17.8 0.0 0.0 0.0Distributions 0.0 0.0 0.0 – 247.1 – 247.1 – 7.7 – 254.8Changes in the consolidated group 0.0 0.0 0.0 0.0 0.0 26.1 26.1Otherincomeandexpenserecognized in equity

0.2

– 1.0

0.3

0.7

0.2

1.8

2.0

December 31, 2015 408.4 – 57.1 1,735.2 1,889.2 3,975.7 107.0 4,082.7

89

CONSOLIDATED VALUE ADDED STATEMENT*

Origin of value addedin millions of EUR 2015 2014

Change%

Sales 11,046.8 10,126.4 9.1Changesininventoriesandownworkcapitalizedforcapitalexpenditure 26.5 19.0 39.5Other operating income 177.6 83.0 > 100Finance revenue 39.5 42.5 – 7.1

11,290.4 10,270.9 9.9

Less advance paymentsCostofmaterialsandcostoffinancialservices 5,461.7 4,900.1 11.5Other operating expenses 1,794.2 1,651.4 8.6Amortizationanddepreciation 331.5 277.7 19.4

7,587.4 6,829.2 11.1

Value added 3,703.0 3,441.7 7.6

Purposein millions of EUR 2015 2014

Change%

Employees (personnel expenses) 3,092.0 2,845.5 8.7Public sector (tax expenses) 81.8 122.5 – 33.2Company 344.1 311.5 10.5Equity holders** 90.1 66.0 36.5Lenders 95.0 96.2 – 1.2Value added 3,703.0 3,441.7 7.6

* NotpartoftheconsolidatedfinancialstatementsinaccordancewithIFRS** Distributions net of contribution to capital

90


NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS

A. General information

TheheadquartersoftheWürthGrouparelocatedin74650Künzelsau,Germany.

ThecorebusinessoftheWürthGroupinvolvestradeinfasteningandassemblymaterialsworldwide.ThecompaniesthatmakeuptheWürthGroup’sactivesalesoperationsaredividedintotwooperationalunits:WürthLineandAlliedCompanies.

Würth Line operations focus on fastening and assembly materials, supplying customers in the trades, the construction sector,andindustry.ThesalesportfoliooftheWürthLinecomprisesproductssoldunderitsownbrandnameandbyitsownsalesorganization.Itsmainbusinessactivityincludesthesaleofscrews,screwaccessories,DINandstandardparts,chemical-technicalproducts,furnitureandironfittings,dowels,insulation,handtools,powertools,cuttingandpneumatictools,serviceandcareproducts,connectingandfasteningmaterials,stockingandpickingsystemsaswellasthedirectshipmentofworkwear.

TheAlliedCompanies,whicheitheroperateinbusinessareasadjacenttothecorebusinessorindiversifiedbusinessareas,roundofftheWürthGroup’sportfolio.Theyaredividedintoninestrategicbusinessunits.Withtheexceptionofasmallnumberofmanufacturingcompanies,themajorityaresalescompaniesoperatinginrelatedareas.TheDiversificationunitwithintheAlliedCompaniescomprisesservicecompanies,suchashotelsandrestaurants,andlogisticsoperators.

B. Adoption of International Financial Reporting Standards

Statement of complianceTheconsolidatedfinancialstatementsoftheWürthGroupwerepreparedaccordingtotheInternationalFinancial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), London, as adopted by the EU, theadditionalrequirementsofGermancommerciallawpursuanttoSec.315a(1)HGB[“Handelsgesetzbuch”:GermanCommercialCode]andfullIFRS.Theconsolidatedfinancialstatementsconsistoftheconsolidatedincomestatement,consolidatedstatementofcomprehensiveincome,consolidatedstatementoffinancialposition,consolidatedstatementofcashflows,consolidatedstatementofchangesinequityandnotesontheconsolidatedfinancialstatements.TheGroupmanagementreporthasbeenpreparedinaccordancewithSec.315HGB.

Basis of preparation AllIFRSwhoseadoptionismandatoryasofDecember31,2015havebeenapplied.ThisalsoincludestheInternationalAccountingStandards(IAS)aswellastheinterpretationsissuedbytheIFRSInterpretationsCommittee(formerly:IFRIC)and the Standing Interpretations Committee (SIC).

Thefinancialstatementshavebeenpreparedonthebasisofhistoricalcost,withtheexceptionoffinancialassetsatfairvaluethroughprofitorlossandavailable-for-salefinancialassets,whicharemeasuredatfairvaluewithoutaffectingonprofitorloss.

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Theconsolidatedfinancialstatementshavebeenpreparedineuro.Allfiguresarereportedinmillionsofeuro(EUR)unlessotherwiseindicated.

Theitemsinthestatementoffinancialpositionhavebeenclassifiedintocurrentandnon-currentassetsandliabilitiesinaccordancewithIFRS.Itemsnotduewithinayeararedisclosedasnon-currentassetsornon-currentliabilities.Inaddition,deferred taxes are disclosed as non-current assets or liabilities.

The consolidated income statement has been prepared using the nature of expense method.

TheconsolidatedfinancialstatementswereauthorizedbytheCentralManagingBoardoftheWürthGroupon March11,2016forissuetotheauditcommitteeoftheWürthGroup’sAdvisoryBoard.

Use of estimates and judgmentsThepreparationoftheconsolidatedfinancialstatementspursuanttoIFRSrequiresmanagementtomakeestimatesandassumptionsthataffectthereportedamountsofassetsandliabilities,thedisclosureofcontingentliabilitiesandotherfinan-cial obligations as of the reporting date, and the reported amounts of income and expenses during the reporting period. TheassumptionsandestimatesarebasedprimarilyonGroup-wideregulationsgoverningusefullives,accountingpoliciesforcapitalizeddevelopmentcostsandprovisions,theprobabilityoffuturetaxreliefbeingrealizedfromdeferredtaxassetsandontheassumptionsregardingthefutureearningspowerofcash-generatingunits.Actualamountsinfutureperiodsmaydifferfromtheestimates.Changesarerecognizedinincomeifandwhenbetterinformationbecomesavailable.

Themainassumptionsconcerningthefutureandotherkeysourcesofestimationuncertaintyasofthereportingdatethatentailariskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitiesinthefollowingfiscalyeararediscussedbelow.

a)ImpairmentofgoodwillTheWürthGrouptestsgoodwillforimpairmentatleastonceayear.Thisinvolvesanestimateofthenetsellingpriceofthecash-generatingunitstowhichthegoodwillisattributed.Thecash-generatingunitsaredeterminedonthebasisofthelowestlevelusedtomonitorgoodwillforinternalpurposesbymanagementmakingdecisionsonbusinesscombinations.IntheWürthGroupthisisthelegalentity,withtheexceptionofDinolandDiffutherm,whichareconsideredtobeareport-ingunit.AsofDecember31,2015,thecarryingamountofgoodwilltotaledEUR299.0million(2014:EUR63.2million).Furtherdetailsarepresentedinthenotesontheconsolidatedstatementoffinancialpositionunder[10]“Intangibleassetsincludinggoodwill”.

b) Impairment of intangible assets and property, plant and equipmentThe Würth Group tests intangible assets and property, plant and equipment for impairment if events or changes in circum-stances suggest that it may not be possible to recover the carrying amount of an asset. The intrinsic value is calculated by comparingthecarryingamountoftheindividualassetswiththeirrecoverableamount.Therecoverableamountiseitherthevalueinuseorthefairvalue,whicheverishigher,lessthecostofsale.Thevalueinuseistheamountcalculatedby

NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS

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discountingtheestimatedfuturecashflows.Ifanassetdoesnotgenerateanycashinflowsthatarelargelyindependentofthecashinflowsgeneratedbyotherassetgroups,theimpairmenttestisnotcarriedoutatthelevelofanindividualasset,but at the level of the cash-generating unit. Further details are presented in the notes on the consolidated statement of financialpositionunder[10]“Intangibleassetsincludinggoodwill”and[11]“Property,plantandequipment”.

c)UnusedtaxlossesandtemporarydifferencesDeferredtaxassetsarerecognizedforallunusedtaxlossesandtemporarydifferencestotheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthelossescanbeutilized.Significantmanagementjudgmentisrequiredtodeterminetheamountofdeferredtaxassetsthatcanberecognized,baseduponthelikelytimingandtheleveloffuturetaxableprofitstogetherwithfuturetaxplanningstrategies.Unusedtaxlossesandtemporarydifferencesareconsideredrecoverableonlyiftheyarelikelytobeusedwithinthenextfiveyears.Deferredtaxassetsrecognizedonunusedtaxlosses amount to EUR 24.4 million as of December 31, 2015 (2014: EUR 24.0 million).

d)Obligationsfrompost-employmentbenefitsThecostofdefinedbenefitpensionplansandotherpost-employmentmedicalbenefitsandthepresentvalueofthepen-sionobligationsaredeterminedusingactuarialvaluations.Anactuarialvaluationinvolvesmakingvariousassumptions.These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Duetothecomplexityofthevaluation,theunderlyingassumptionsanditslong-termnature,adefinedbenefitobligationishighlysensitivetochangesintheseassumptions.Allassumptionsarereviewedateachreportingdate.Indeterminingtheappropriatediscountrate,managementconsiderstheinterestratesofcorporatebondsintheirrespectivecurrencieswithatleastanAAratingorabove,andtheextrapolatedmaturitycorrespondingtotheexpecteddurationofthedefinedbenefitobligation.Moreover,thequalityoftheunderlyingbondsisassessed.Thosehavingexcessivecreditspreadsareexcludedfromtheanalysisofbondsfromwhichthediscountrateisderived,onthebasisthattheydonotrepresenthigh-qualitybonds.Themortalityrateisbasedonpubliclyavailablemortalitytablesforthespecificcountry.Futuresalaryincreasesandpensionincreasesarebasedonexpectedfutureinflationratesfortherespectivecountry.Thenetcarryingamountsoftheobligationsfrompost-employmentbenefitsamounttoEUR248.7millionasofDecember31,2015(2014:EUR244.8million).Furtherdetailsarepresentedinthenotesontheconsolidatedstatementoffinancialpositionunder[25]“Obligationsfrompost-employmentbenefits”.Allparametersarereviewedannually.

e) SecuritiesFinancialassetsforwhichthereisnoactivemarketweremeasuredonthebasisoftheexpectedcashflowsdiscountedataratethatreflectsthetermsandrisksinvolved.Thismeasurementissubjecttoestimationuncertaintybecauseitismostsensi-tivetothediscountratesusedinthediscountedcashflowmethodaswellastheexpectedfuturecashinflows.ThefairvalueofthesefinancialassetstotaledEUR71.1millionasofDecember31,2015(2014:EUR75.3million).

f) Development costsDevelopmentcostsarecapitalizedinaccordancewiththeaccountingpoliciespresentedinsectionF.Initialrecognitionofdevelopment costs is based on an assessment by management that the development is both technically and economically feasible.Generally,thisisthecaseifaproductdevelopmentprojecthasreachedacertainmilestonewithinanexistingprojectmanagementmodel.Whendeterminingtheamountstobecapitalized,managementmakesassumptionsregardingtheexpectedfuturecashgenerationoftheassets,discountratestobeappliedandtheexpectedperiodofbenefits.AsofDecember31,2015thecarryingamountofcapitalizeddevelopmentcostswasEUR20.2million(2014:EUR19.6million).

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g) ReceivablesTodeterminespecificallowances,receivablesthatcouldpotentiallybeimpairedareassessedforimpairmentandvaluationallowancesappliedwhereappropriate.Thecalculationofvaluationallowancesonreceivablesisbasedprimarilyonassess-mentsandanalysesperformedbythelocalmanagement.Inadditiontothecreditworthinessof,anddefaultonpaymentby,thecustomerinquestion,historicaldefaultratesarealsotakenintoaccount.Furtherdetailsarepresentedinthenotesontheconsolidatedstatementoffinancialpositionunder[13]“Receivablesfromfinancialservices”and[16]“Tradereceivables”.

h)Purchasepriceliabilitiesforsubsidiaries/businessoperationsacquiredSome business combinations involve conditional purchase price components, or the seller is granted put options for non-controllinginterests.Theresultingpurchasepriceliabilitiesaresubjecttoestimatesintheformoftheobjectivesthatcanbeachievedinthefutureandwithrespecttothepresentvalueassumptionsforthefuturepurchaseprices.

Effects of new accounting standardsTheaccountingpoliciesadoptedareconsistentwiththoseofthepriorfiscalyear,exceptthattheGrouphasadoptedthenew/revisedIFRSandIFRICinterpretationssetoutbelow,whicharemandatoryforfiscalyearsbeginningonorafterJanuary 1, 2015. The changes in accounting policies and in the disclosures in the notes are due primarily to adoption of:• IAS 19 “Employee Benefits”• Improvements to IFRS 2010–2012• Improvements to IFRS 2011–2013

Theadoptionofthesestandardsandinterpretationsisdescribedbelow:The amendment to IAS 19 “Employee Benefits” waspublishedinNovember2013andistobeappliedforthefirsttimetothefiscalyearstartingonorafterJuly1,2014.Theamendmentrelatestothereportingofcontributionsmadebyemployeesorthirdpartiestothepensionplanasareductionofservicecosts,insofarasthesecontributionsreflecttheben-efitprovidedduringthereportingperiod.Theamendmentistobeappliedretroactively.TheamendmentwillnothaveanymaterialimpactontheconsolidatedfinancialstatementsoftheWürthGroup.

Improvements to IFRS 2010–2012 TheimprovementstoIFRS2010–2012constituteanomnibusofamendmentsthatwaspublishedinDecember2013andistoapply,inthemain,tofiscalyearsbeginningonorafterJuly1,2014,andwillnothaveanymaterialimpactonthecon-solidatedfinancialstatementsoftheWürthGroup.• IFRS 2 “Share-Based Payment”clarifiesthedefinitionofexerciseconditionsandmarketconditionsandaddsdefi-nitionsforperformanceconditionsandserviceconditions(whichpreviouslyformedpartofthedefinitionofexerciseconditions).

• IFRS 3 “Business Combinations” (with subsequent changes to other standards) clarifiesthatcontingentconsid-erationthatisclassifiedasanassetoraliabilityistobemeasuredatfairvalueoneachreportingdate.

• IFRS 13 “Fair Value Measurement”(amendingonlytheBasisforConclusionswithsubsequentamendmentstotheBasisforConclusionsforotherstandards)clarifiesthatissuingIFRS13andamendingIFRS9andIAS39didnotremovetheabilitytomeasureshort-termreceivablesandpayableswithnostatedinterestrateattheirinvoiceamountswithoutdiscountingiftheeffectofnotdiscountingisimmaterial.

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• IAS 16 “Property, Plant and Equipment” clarifiesthatwhenanitemofproperty,plantandequipmentisrevalued thegrosscarryingamountisadjustedinamannerthatisconsistentwiththerevaluationofthecarryingamount.

• IAS 24 “Related Party Disclosures”clarifiesthatanentityprovidingkeymanagementpersonnelservicestothereporting entity or to the parent of the reporting entity is a related party of the reporting entity.

Improvements to IFRS 2011–2013TheimprovementstoIFRS2011–2013constituteanomnibusofamendmentsthatwaspublishedinDecember2013andincludeschangestovariousIFRSthataretoapply,asamandatoryrequirement,tofiscalyearsbeginningonorafterJuly1,2014.TheWürthGrouphasnotyetappliedthefollowingamendmentsbutdoesnotexpectthemtohaveanymaterialimpactontheconsolidatedfinancialstatements:• IFRS 3 “Business Combinations” clarifiesthatIFRS3excludesfromitsscopetheaccountingfortheformationofajointarrangementinthefinancialstatementsofthejointarrangementitself.

• IFRS 13 “Fair Value Measurement” clarifiesthatthescopeoftheportfolioexceptiondefinedinparagraph52ofIFRS13includesallcontractsaccountedforwithinthescopeofIAS39“FinancialInstruments:RecognitionandMeasurement”orIFRS9“FinancialInstruments”,regardlessofwhethertheymeetthedefinitionoffinancialassetsorfinancialliabilitiesasdefinedinIAS32“FinancialInstruments:Presentation.”

• IAS 40 “Investment Property”clarifiesthatdeterminingwhetheraspecifictransactionmeetsthedefinitionofbothabusinesscombinationasdefinedinIFRS3“BusinessCombinations”andinvestmentpropertyasdefinedinIAS40“InvestmentProperty”requirestheseparateapplicationofbothstandardsindependentlyofeachother.

Published standards endorsed by the EU in the comitology procedure that are not yet effective.

StandardsissuedbutnotyeteffectivebythedateofissuanceoftheconsolidatedfinancialstatementsoftheWürthGrouparelistedbelow.ThislistingofstandardsandinterpretationsissuedincludesthosethattheWürthGroupreasonablyexpectstohaveaneffectondisclosuresinthenotes,netassets,financialpositionandresultsofoperationswhenappliedatafuturedate.TheWürthGroupintendstoadoptthosestandardsassoonastheybecomeeffective.

The amendment to IFRS 11 “Acquisition of an Interest in a Joint Operation” waspublishedinMay2014andistobeappliedforthefirsttimetothefiscalyearstartingonorafterJanuary1,2016.Theamendmentstatesthatajointoperatorreportingtheacquisitionofaninterestinanexistingjointoperationthatconstitutesabusiness,asdefinedinIFRS3“BusinessCombinations”,isrequiredtoapplyalloftheprinciplesonbusinesscombinationsaccountinginIFRS3andotherstandardsandmustmakethedisclosuressetoutinthesestandardsforbusinesscombinations.Italsoclarifiesthatpreviouslyheldinterestsinajointoperationarenotremeasureduponacquisitionofanadditionalinterestinthesamejointoperationwhilstretainingjointcontrol.Theamendmentalsoincludesascopeexceptiondesignedtoclarifythattheamendmentsdonotapplyiftheparties(includingthereportingcompany)thatsharethejointcontrolareunderthejointcontrolofoneparty.Theamendmentappliesbothtothefirst-timeacquisitionofinterestsinajointoperationandtheacqui-sitionoffurtherinterestsinthesamejointoperation.Theamendmentistobeappliedprospectively.Earlieradoptionisper-mitted.TheamendmentswillenhancecomparabilityandcouldhaveanimpactonthecomparabilityoftheWürthGroup,theapplicationoftheprovisionssetoutinIFRS3“BusinessCombinations”forjointactivitiesthatconstituteabusinesscouldresultinthestatementofgoodwillinthefuture.

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The amendments to IAS 16 and IAS 38 “Acceptable Methods of Depreciation and Amortization” clarify the princi-plesetoutinIAS16andIAS38thattherevenueshouldreflecttheeconomicbenefitsgeneratedfromtheoperationofabusiness(ofwhichanassetispart).Revenuedoesnot,ontheotherhand,correspondtotheeconomicbenefitconsumedbytheuseoftheasset.Asaresult,therelationshipbetweentherevenuegeneratedandtheexpectedfuturetotalrevenuecannotbeusedforthedepreciationofproperty,plantandequipment,butonlyfortheamortizationofintangibleassets– and even so, only in very limited cases. The amendment is to be applied prospectively and applies to reporting years starting on or after January 1, 2016. Earlier adoption is permitted.

Aspartofitsmajor“DisclosureInitiative”projecttoexploreandimprovepresentationanddisclosurerequirements,theIASBhaspublishedthefirstsetofchangesto IAS 1 “Presentation of Financial Statements”. These include limited amendments designed to encourage companies to exercise more discretion in stating and presenting information. The amendmentsclarify,bywayofexample,thattheprincipleofmaterialityrelatestotheentirefinancialstatementsandthatstatingimmaterialinformationcanmakefinancialdatalessuseful.Morediscretionshouldalsobeexercisedwhenitcomestothepositionandorderofinformationinthefinancialstatements.Theseamendmentsaremandatoryforfiscalyearsbeginning on or after January 1, 2016. Earlier adoption is permitted.

Improvements to IFRS 2012–2014TheimprovementstoIFRS2012–2014constituteanomnibusofamendmentsthatwaspublishedinSeptember2014andincludeschangestovariousIFRSthataretoapply,asamandatoryrequirement,tofiscalyearsbeginningonorafterJanuary 1, 2016.• IFRS 5 “Non-Current Assets Held for Sale and Discontinued Operations”addsspecificguidanceforcasesinwhichanentityreclassifiesanassetfromheldforsaletoheldfordisposal(orviceversa).

• IFRS 7 “Financial Instruments: Disclosures” addsadditionalguidancetoclarifywhetheraservicingcontractcon-stitutes a continuing involvement in a transferred asset for the purpose of determining the disclosures required. It also clarifiestheapplicabilityoftheamendmentstoIFRS7onoffsettingfinancialassetsandliabilitiestocondensedinterimfinancialstatementspursuanttoIAS34.

• IAS 19 “Employee Benefits”clarifiesthatthemarketdepthofhighqualitycorporatebondsistobeassessedinthecurrencyinwhichtheobligationisdenominatedinsteadofmerelyatthelevelofthecountryinwhichtheobligationislocated.Ifthereisnoliquidmarketforhigh-qualitycorporatebondsinthiscurrency,governmentbondshavetobeused.

Published standards not yet endorsed by the EU in the comitology procedure

TheIASBhaspublishedthefollowingstandardsandinterpretationswhoseadoptionwasnotyetmandatoryinthe2015fiscalyear.ThesestandardsandinterpretationshavenotyetbeenrecognizedbytheEUandwillbeappliedbytheWürthGroup as soon as they come into force. This listing of standards and interpretations issued includes those that the Würth Groupreasonablyexpectstohaveaneffectondisclosuresinthenotes,netassets,financialpositionandresultsofoperations.

InJuly2014,theInternationalAccountingStandardsBoard(IASB)publishedthefinalizedversionof IFRS 9 “Financial Instruments”,whichincorporatestheresultsofallphasesintheIFRS9projectandreplacesbothIAS39“FinancialInstruments:RecognitionandMeasurement”andallpreviousversionsofIFRS9“FinancialInstruments”.IFRS9iseffectiveforthefirsttimeforfiscalyearsbeginningonorafterJanuary1,2018.EarlierapplicationofthefinalstandardIFRS9

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(2014) is permitted at any time. The standard is to be applied retroactively. Companies also have the option of only adoptingtheprovisionsonthepresentationofvaluechangesthatareattributabletotheirowncreditriskearlyon,withouthavingtoapplytheotherprovisionssetoutinIFRS9(2014).Thestandardcontainsnewprovisionsonclassificationandmeasurement,impairmentandhedgeaccountingphases.ThenewstandardwillhaveaneffectontheclassificationandmeasurementoftheWürthGroup’sfinancialassets,butwillnothaveaneffectontheclassificationandmeasurementoffinancialliabilities.

IFRS 15 “Revenue from Contracts with Customers”introducesanewfive-steprevenuerecognitionmodeltobeappliedtoallcontractswithcustomers.ThecoreprincipleofIFRS15isthatanentitywillrecognizerevenueatthetimeofthetransferofgoodsorservicestocustomersinanamountthatreflectstheconsiderationtowhichtheentityexpectstobe entitled in exchange for those goods or services. The principles in IFRS 15 provide a structured approach for the mea-surementandreportingofrevenue.Thestandard’sscopeofapplicationcoversalltypesofsectorsandcompaniesandthusreplacesallexistingprovisionsrelatingtorevenuerecognition(IAS11“ConstructionContracts”,IAS18“Revenue”,IFRIC13“CustomerLoyaltyProgrammes”,IFRIC15“AgreementsfortheConstructionofRealEstate”,IFRIC18“TransfersofAssetsfromCustomers”andSIC31“Revenue–BarterTransactionsInvolvingAdvertisingServices”).Thestandardmust be applied to reporting periods starting on or after January 1, 2018. Earlier adoption is permitted. The standard is to beadoptedwithretroactivelyeffectandwillnothaveanymaterialimpactontheconsolidatedfinancialstatementsoftheWürth Group.

The amendment to IFRS 10 and IAS 28 “Sales or Contributions of Assets between an Investor and its Associ-ate / Joint Venture”waspublishedinSeptember2014andistobeappliedforthefirsttimetotransactionsexecutedinthefiscalyearstartingonorafterJanuary1,2016.ItisdesignedtoresolveinconsistenciesbetweenIFRS10andIAS28relatingtothelossofcontroloverasubsidiarythatisincorporatedintoanassociateorjointventure.Theamendmentclar-ifiesthatthegainorlossresultingfromthesaleorcontributiontoanassociateorajointventureofassetsthatconstituteabusinessasdefinedinIFRS3“BusinessCombinations”istoberecognizedinfullbyaninvestor.IfacompanyretainsaninterestinaformersubsidiaryafterthelossofcontrolandthissubsidiarydoesnotconstituteabusinessasdefinedinIFRS3,thegainorlossresultingfromtheremeasurementoftheremaininginterestatfairvalueisrecognizedonlytotheextentofunrelatedinvestors’interests.Theamendmentistobeappliedprospectively.Earlieradoptionispermitted.TheWürthGroupdoesnot,however,expecttheinitialapplicationtohaveanymaterialimpactontheconsolidatedfinancialstatements.

IFRS 16 “Leases” waspublishedonJanuary13,2016andismandatory,forthefirsttime,forfiscalyearsbeginningonor after January 1, 2019. The standard provides a single lessee accounting model. The model means that all assets and liabilitiesfromleaseshavetoberecognizedbythelesseeinthestatementoffinancialposition,unlesstheleasetermis12monthsorlessortheunderlyingassethasalowvalue(optionalineachcase).Lessorscontinuetoclassifyleasesasoperatingorfinanceleasesforaccountingpurposes.Inthisrespect,IFRS16’sapproachtolessoraccountingissubstan-tiallyunchangedfromitspredecessor,IAS17.TheWürthGroupiscurrentlyassessingtheeffectondisclosuresinthenotes,netassets,financialpositionandresultsofoperations.

Inconnectionwithits“DisclosureInitiative”,theIASBpublishedamendmentstoIAS 7 “Statement of Cash Flows” in January 2016. The amendments essentially relate to requirements for additional disclosures in the notes, the aim being to allowusersofanentity’sfinancialstatementstoevaluatechangesintheentity’sliabilitiesarisingfromfinancingactivities.

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Theamendmentsaremandatory,forthefirsttime,forfiscalyearsbeginningonorafterJanuary1,2017.Earlieradoptionispermitted.Entitiesneednotprovidecomparativeinformationonpreviousperiodswhentheyfirstapplytheamendments.ThisamendmentisunlikelytohaveanymaterialimpactontheconsolidatedfinancialstatementsoftheWürthGroup.

The IASB published amendments to IAS 12 “Income Taxes” inJanuary2016.Specifically,theamendmentsrelatetotherecognitionofdeferredtaxassetsforunrealizedlosses.Theamendments–“RecognitionofDeferredTaxAssetsforUnre-alizedLosses”–aredesignedtoaddressvariousissuesrelatingtotherecognitionofdeferredtaxassetsforunrealizedlossesresultingfromchangesinthefairvalueofdebtinstruments,whicharereportedunderothercomprehensiveincome.TheamendmentstoIAS12areeffectiveforfiscalyearsbeginningonorafterJanuary1,2017.Earlieradoptionispermit-ted.Theamendmentstothisstandardareunlikelytohaveanymaterialimpactontheconsolidatedfinancialstatementsofthe Würth Group.

C. Consolidated group

TheconsolidatedfinancialstatementsoftheWürthGroupincludeparentcompaniesatthesameorganizationallevelaswellasalldomesticandforeignentitiesinwhichtheparentcompaniesatthesameorganizationallevelholdamajorityof the voting rights, either directly or indirectly, and thus have the possibility to exercise control over said entities. The parentcompanies–andhencetheentireWürthGroup–aresubjecttocommoncontrolbytheCentralManagingBoard.TheconsolidatedgroupisthereforebasedontheWürthGroup’suniformownership,organizationalandmanagementstructure,asonlythispresentationgivesatrueandfairviewoftheWürthGroup.DeterminingtheconsolidatedgroupinaccordancewithIAS27/IFRS10wouldnotgiveatrueandfairvalueofthenetassets,financialpositionandresultsofoperationsbecausetransactionsbetweenthesubgroupstherebycreatedwouldnotbepresentedfairly.Inthiscase,thesubgroupswouldprovideanincompleteandmisleadingpresentationoftheeconomicandfinancialconditionsoftheWürthGroupregardingpracticallyeveryitemoftheconsolidatedfinancialstatements.

Subsidiariesarefullyconsolidatedfromthedateofacquisition,beingthedateonwhichtheWürthGroupobtainscontrol,and continue to be consolidated until the date that such control by the parent ceases.

The cost of subsidiaries and business operations acquired comprises the consideration transferred plus any non-controlling interests.

Themajorchangestotheconsolidatedgroupincomparisontotheprioryearonaccountofacquisitionsareasfollows:On July 31, 2015, the Würth Group acquired 100 % of the shares and voting rights in Northern Safety Company, Inc., Frankfort,USA.ThisacquisitionexpandstheindustrybusinessunitintheUSandspecializesinmulti-channelsalesofindustrialsafetyproductsandpersonalsafetyequipment.ApurchasepriceofUSD208.5millionwasagreed,USD67.5millionofwhichwaspaidthroughtheassumptionofdebt.Furthermore,aconditionalpurchasepricepaymentdependingonmarginandsalesdevelopmentin2015–2017andonaverageEBITDAin2018–2019wasagreed.Thefairvalueofthecondi-tionalpurchasepricecomestoUSD89.0millionandisincludedinotherfinancialliabilities.

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Thepurchasepriceallocation,whichisprovisionalwithrespecttothetaxadvantagescontainedinthepurchaseprice,isasfollows:

in millions of EURFair value at

acquisition datePrevious

carrying amountAssetsCustomer base 50.0 3.2Brand 31.2 0.0Other intangible assets 2.6 2.6Other property, plant and equipment 7.9 7.9Inventories 19.7 19.7Trade receivables 15.2 15.2Income tax assets 3.2 3.2Other assets 4.7 4.7

134.5 56.5

LiabilitiesFinancial liabilities 45.1 45.1Trade payables 12.9 12.9Liabilities to employees 13.4 13.4Deferred tax liabilities 30.4 0.0Other liabilities 3.7 3.7

105.5 75.1Total identifiable net assets 29.0 – 18.6

Goodwillarisingfromthebusinesscombination 181.7Consideration transferred 210.7

Transaction costs 1.3Net cash outflow 212.0

Thegoodwillthatisnotlikelytobetax-deductiblelargelyincludessynergyeffectsrelatingtosalesandprocurement.Theintangibleassetsacquiredwerevaluedusingincome-basedapproaches.Since the acquisition date, the company has contributed EUR 64.4 million to sales. The net loss for the year came in at EUR2.5million.Theproformasalesin2015totaledEUR161.7millionwithaproformalossofEUR2.4million.

The following acquisitions were also made: On January 2, 2015, the Würth Group acquired a further 25.9 % of the shares and voting rights in PARAVAN GmbH, Pfronstetten-Aichelau,Germany,andnowholdsastakeof51%inthiscompany.PARAVANGmbH,Pfronstetten-Aichelau,Germany,hasmorethantenyears’experienceinthefieldofdrive-by-wiretechnologyforpeoplewithdisabilities,andspecializesinthemanufactureofmobilityproductsforthedisabled.Withinthecontextofthisacquisition,theGroupoptedtovaluethenon-controllinginterestsbasedontheprorataidentifiablenetassetsoftheacquiredcompany.ThepurchasepricecametoEUR30.0millionandwaspaidusingcashandcashequivalents.Theintereststhathadalreadybeen

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acquiredinpriorperiodswerestatedatafairvalueofEUR9.0million.Anagreementwasalsoreachedonaconditionalpurchasepricepayment,dependingonearnings,ofamaximumofEUR15.0million.Thiswasalsomeasuredatfairvalue.

On February 10, 2015, the Würth Group acquired 65 % of the shares and voting rights in MEF S.r.l., Florence, Italy. This electricalwholesalerhassubsidiariesintheregionsofTuscany,Liguria,UmbriaandLazio. Thefollowingbusinessoperationswerealsoacquired:OnJanuary2,2015,theWurthWoodGroupInc.,Charlotte,USA,purchasedthebusinessoperationsofUnitedPlywoods&Lumber,Inc.,Birmingham,USA.ThiswillallowWurthWoodGroupInc.,Charlotte,USA,toexpanditsactivitiesintheTennessee and Alabama region.

On October 9, 2015, Wurth Des Moines Bolt Inc., Des Moines, USA, acquired the business operations of Des Moines Bolt Supply,Inc.,DesMoines,USA,andthoseofHorizonIndustrialSupply,Inc.,DesMoines,USA.Thesecompaniesfocusonthedistributionoffasteningmaterialstoindustrialcompaniesandcomplementtheregionalnetworkoftheindustrybusinessunit in the US.

in millions of EURPARAVAN

GmbH MEF S.r.l.

WurthDes Moines

Bolt Inc.

United Plywoods&Lumber, Inc. Other Total

AssetsFranchises, industrial rights, licenses and similar rights 32.9 6.2 0.0 0.0 1.6 40.7Goodwill 22.9 17.6 6.4 0.0 9.7 56.6Customer relationships and similar assets 0.0 4.0 30.6 4.4 7.5 46.5Other non-current assets 5.1 19.3 0.2 2.2 0.4 27.2Financial assets 0.3 0.9 0.0 0.0 0.0 1.2Inventories 2.7 20.8 14.1 3.7 4.0 45.3Receivables and other assets 1.1 72.1 3.4 2.5 1.5 80.6Cash and cash equivalents 1.8 0.2 0.0 0.2 3.2 5.4

66.8 141.1 54.7 13.0 27.9 303.5

Equity and liabilitiesDeferred tax liabilities 9.2 3.2 0.0 0.0 2.1 14.5Non-current liabilities 1.0 13.9 0.0 0.0 0.7 15.6Current liabilities 2.2 93.4 1.4 2.6 2.4 102.0

12.4 110.5 1.4 2.6 5.2 132.1Non-controlling interests 15.4 10.7 0.0 0.0 0.0 26.1Basic purchase price 39.0 16.9 50.8 8.9 16.1 131.7Conditional purchase price payment 0.0 3.0 2.5 1.5 6.6 13.6Consideration transferred 39.0 19.9 53.3 10.4 22.7 145.3Pro rata sales 19.7 120.9 7.5 30.9 12.9 191.9Shareofprofit/loss 0.9 0.6 – 0.6 – 0.4 1.2 1.7Pro forma sales in 2015 19.7 129.5 37.7 30.9 17.0 234.8Proformaprofit/lossin2015 0.9 – 0.1 – 2.9 – 0.4 1.3 – 1.2

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Thefranchises,industrialrights,licensesandsimilarrightswerevaluedusingincome-basedapproaches.Thegoodwillthatisnotlikelytobetax-deductiblelargelyincludessynergyeffectsrelatingtosalesandprocurement.Thecarryingamountofthereceivablesandotherassetscorrespondstothefairvalue.Inthe2015fiscalyear,expensesamountingtoEUR5.9million(2014:EUR3.3million)resultingfromtheimpairmentofassetsidentifiedinthecourseofpurchasepriceallocationwererecognizedinconnectionwithbusinesscombinationsfromprioryears.

D. Consolidation principles

TheconsolidatedfinancialstatementsarebasedonthefinancialstatementsoftheparentcompaniesandsubsidiariesincludedintheGroupasofDecember31,2015,whichhavebeenpreparedaccordingtouniformstandards.

AcquisitionaccountingisperformedusingtheacquisitionmethodinaccordancewithIFRS3(revised).Accordingly,theconsideration transferred to the seller plus any non-controlling interests and the fair value of the previously held equity interestsintheacquireeareoffsetagainstthefairvalueoftheacquiredassetsandliabilitiesasoftheacquisitiondate.Anyremainingcreditdifferencesareaccountedforasgoodwill.Anyremainingdebitdifferencesarepostedtoprofitorloss.Anycontingentconsiderationisrecognizedatacquisition-datefairvalue.SubsequentchangestothefairvalueofthecontingentconsiderationthatisdeemedtobeanassetorliabilitywillberecognizedinaccordancewithIAS39eitherinprofitorlossorasachangetoothercomprehensiveincome.Ifthecontingentconsiderationisclassifiedasequity,itisnotremeasuredanditssubsequentsettlementisaccountedforwithinequity.BusinesscombinationsachievedinstageswheretheGroupalreadyhascontrolordisposalsofshareswithoutalossofcontrolarerecognizeddirectlyinequityfromfiscalyear2010onwards.

In the case of business combinations achieved in stages that give rise to control over an entity, or in the case of disposals of shares that result in a loss of control, the previously held or remaining equity interests are remeasured at fair value throughprofitorloss.

Achangeintheownershipinterestofasubsidiarywithoutinvolvingthelossofcontrolisaccountedforasanequitytransaction.Transactionsundercommoncontrolarerecognizedusingthepooling-of-interestmethod.Underthismethod,anygainsorlossesondisposallackingcommercialsubstanceareoffsetdirectlywithequityfromthereserves.ThesameaccountingpoliciesareusedtodeterminetheGroup’sshareinequityofallcompaniesaccountedforusingtheequitymethod.Receivablesandliabilitiesbetweentheconsolidatedentitiesarenetted.Intercompanyprofitsininventoriesandnon-current assets are eliminated in the consolidated income statement. Intercompany sales and other intercompany incomearenettedagainstthecorrespondingexpense.Deferredtaxisrecognizedforconsolidationtransactionsthatarerecognizedinprofitorloss.

Non-controllinginterestsrepresenttheportionofprofitorlossandnetassetsnotattributabletotheequityholdersoftheparent companies in the Group. Non-controlling interests are presented separately in the consolidated income statement andtheconsolidatedstatementoffinancialposition.Intheconsolidatedstatementoffinancialposition,non-controllinginterests are disclosed in equity, separately from the equity attributable to the parent companies in the Group.

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E. Foreign currency translation

Intheseparatefinancialstatementsoftheentities,non-monetaryandmonetaryitemsdenominatedinforeigncurrencyarerecognizedattherateprevailingwhentheywerefirstrecorded.Monetaryitemsaretranslatedattheexchangerateasof the reporting date. Any exchange rate gains generated and losses incurred as of the reporting date from the measure-mentofmonetaryassetsandmonetaryliabilitiesdenominatedinforeigncurrencyarerecognizedthroughprofitorlossinfinancerevenueandfinancecostsrespectively.

Thefunctionalcurrencymethodisusedtotranslatethefinancialstatementsofforeignentities.Intheconsolidatedfinancialstatements,exceptforequity,theitemsofthestatementoffinancialpositionofallforeignentitiesaretranslatedtotheeuroatclosingrates,asthesignificantGroupentitiesincludedintheconsolidatedfinancialstatementsconducttheirbusinessindependentlyintheirlocalcurrency,whichisthefunctionalcurrency.Differencescomparedtothetranslationfromtheprevi-ousyearareoffsetagainstreservesdirectlyinequity(othercomprehensiveincome).Goodwillistranslatedattheclosingrate as an asset of foreign entities.

Incomeandexpenseitemsaretranslatedusingaveragerates.Differencescomparedtotheclosingratearealsorecog-nizeddirectlyinequity.

ThefinancialstatementsofthemajorsubsidiariesincountriesoutsidetheEuropeanMonetaryUnionweretranslatedtotheeurousingthefollowingexchangerates:

Average exchange rates forthefiscalyear

Closing rates on the reporting date

2015 2014 2015 20141 US dollar 0.90173 0.75350 0.91625 0.810941 pound sterling 1.37810 1.23999 1.35740 1.268491 Canadian dollar 0.70617 0.68250 0.65967 0.703031 Australian dollar 0.67726 0.68032 0.66997 0.669581Brazilianreal 0.27671 0.32115 0.23134 0.307091 Chinese renminbi yuan 0.14359 0.12260 0.14102 0.131031Danishkrone 0.13408 0.13414 0.13401 0.134411Norwegiankrone 0.11187 0.11991 0.10413 0.111351Polishzloty 0.23924 0.23894 0.23431 0.237141 Russian rouble 0.01485 0.01977 0.01241 0.014291Swedishkrona 0.10693 0.11004 0.10891 0.106381Swissfranc 0.93703 0.82322 0.92345 0.831641Czechkoruna 0.03668 0.03630 0.03701 0.036181 Hungarian forint 0.00323 0.00324 0.00317 0.00322

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F. Accounting policies

TheWürthGroupusestransactiondateaccounting.ThefinancialstatementsofallconsolidatedcompanieshavebeenpreparedinlinewithuniformaccountingpoliciesfortheGroup(IFRS).

Goodwill arisingfromabusinesscombinationisinitiallymeasuredatcost,whichistheexcessofthecostofthebusinesscombinationovertheGroup’sinterestinthenetfairvalueoftheidentifiableassets,liabilitiesandcontingentliabilitiesacquired.Afterinitialrecognition,goodwillismeasuredatcostlessanyaccumulatedimpairmentlosses.InaccordancewithIFRS3.19,non-controllinginterestsaremeasuredeitherbasedontheproportionateshare ofidentifiablenetassetsoftheacquiree(partialgoodwill)oratfairvalue(fullgoodwill).Thisdecisioncanbemadeonatransaction-by-transactionbasis for each business combination and is not an accounting policy choice that determines the accounting treatment for all business combinations to be carried out by the Würth Group.

Recognizedgoodwillistestedforimpairmentonanannualbasisandwhenthereisanyindicationthatitmaybeimpaired.Theimpairmenttestforgoodwilliseffectedatthelevelofthecash-generatingunit.Thecash-generatingunitisdefinedasthelegalentity,withtheexceptionofDiffuthermandDinol.

Theimpairmentlossisdeterminedbycalculatingtherecoverableamountofthecash-generatingunittowhichgoodwillrelates.Iftherecoverableamountofthecash-generatingunitislowerthanitscarryingamount,animpairmentlossisrecorded. Intangible assets acquired separately are initially measured at cost. The cost of an intangible asset acquired in a busi-nesscombinationisitsacquisition-datefairvalue.Followinginitialrecognition,intangibleassetsarecarriedatcostlessanyaccumulatedamortizationandanyaccumulatedimpairmentlosses.

Theusefullivesofintangibleassetsareassessedtobeeitherfiniteorindefinite.Theusefullifeofanintangibleassetwithanindefinitelifeisreviewedannuallytodeterminewhethertheindefinitelifeassessmentcontinuestobelegitimate.Ifthisisnotthecase,theassessmentisprospectivelychangedfromanindefinitetoafiniteusefullife.

Intangibleassetswithfinitelivesareamortizedovertheirusefullifeusingthestraight-linemethodandtestedforimpairmentwheneverthereisanyindicationthattheintangibleassetmaybeimpaired.Theusefullifeandtheamortizationmethodforanintangibleassetwithafiniteusefullifearereviewedatthelatestattheendofeachfiscalyear.Thenecessarychangesintheamortizationmethodandtheusefullifearetreatedaschangestoestimates.Amortizationofintangibleassetswithafiniteusefullifeisreportedintheconsolidatedincomestatementunderamortizationanddepreciation.Capitalizedcus-tomerrelationships,software,franchisesandotherlicensesareamortizedoverausefullifeofthreetofifteenyears.

Intangibleassetswithanindefiniteusefullifeandintangibleassetsthatarenotreadyforusearetestedforimpairmentindividuallyatleastonceayear.Suchintangiblesarenotamortized.Theusefullifeofanintangibleassetwithanindefi-nitelifeisreviewedannuallytodeterminewhethertheindefinitelifeassessmentcontinuestobelegitimate.

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If all prerequisites of IAS 38.57 are met, internally generated intangible assets are reported at the amount of the directly attributabledevelopmentcostsincurred.Borrowingcostsarecapitalized.Capitalizationceaseswhentheassetisfinishedandreleased.PursuanttoIAS38.57developmentcostsmayonlybecapitalizedifanentitycandemonstratethatallofthefollowingsixrequirementsaresatisfied:

1.Thetechnicalfeasibilityofcompletingtheassetsothatitwillbeavailableforuseorsale2. The intention to complete the intangible asset and use or sell it3. The ability to use or to sell the intangible asset4.Howtheintangibleassetwillgenerateprobablefutureeconomicbenefits5.Theavailabilityofadequatetechnical,financialandotherresourcestocompletethedevelopmentandtouseorsellthe

intangible asset 6. The ability to measure reliably the expenditure attributable to the intangible asset during its development

TheWürthGroupestimatedthecustomaryusefullifeoftherecognizedinternallygeneratedintangibleassetstobethree years.

CostsofresearchandgeneraldevelopmentareimmediatelyrecordedasanexpenseinaccordancewithIAS38.54.

Property, plant and equipment arestatedatamortizedcost.Repaircostsareexpensedimmediately.Costsofconver-sioncontaindirectlyallocablecosts(suchasdirectmaterialsandlabor)andfixedandvariableproductionoverheads(such as materials and production overheads) including appropriate depreciation of the production plant based on ordi-narycapacityutilization.Borrowingcostsarecapitalizedprovidedtherequirementsforaqualifyingassetaremet.Exceptfor land and land rights, property, plant and equipment are generally depreciated using the straight-line method unless a differentdepreciationmethodbetterreflectsthepatternofconsumption.

Depreciationiscomputedaccordingtothefollowinguniformgroupusefullives:

Buildings 25 – 40 yearsFurnitureandfixtures 3 – 10 yearsTechnical equipment and machines 5 – 15 years

Anitemofproperty,plantandequipmentleasedunderafinanceleaseisrecognizedatfairvalueorthelowerpresentvalueoftheminimumleasepaymentsanddepreciatedovertheexpectedusefullifeorthecontractualterm,whicheverisshorter. Payment obligations resulting from the lease payments are recorded as a liability at their present value.

Theresidualvaluesoftheassets,usefullivesanddepreciationmethodsarereviewedattheendofeachfiscalyearandadjustedifnecessary.

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Anitemofproperty,plantandequipmentoranintangibleassetisderecognizedupondisposalorwhennofutureeco -nomicbenefitsareexpectedfromitsuseordisposal.Anygainorlossarisingfromthedisposaloftheasset(calculatedasthedifferencebetweenthenetdisposalproceedsandthecarryingamountoftheasset)isincludedintheconsolidatedincomestatementintheyeartheassetisderecognized.

Animpairmenttestisperformedattheendofthefiscalyearforallintangibleassetsandproperty,plantandequipmentifevents or changes in circumstances indicate that the carrying amount of the assets exceeds their recoverable amount or if an annual impairment test is required. If the recoverable amount of the asset falls short of the carrying amount, an impair-mentlossisrecognized.Therecoverableamountisthehigherofanasset’snetsellingpriceanditsvalueinuse.Thenetsellingpriceistheamountobtainablefromthesaleofanassetinanarm’slengthtransactionlessthecostsnecessarytomakethesale.Valueinuseisthepresentvalueofestimatedfuturecashflowsexpectedtoarisefromthecontinueduseofan asset and from its disposal at the end of its useful life. The recoverable amount is determined for each asset individually or, if that is not possible, for the cash-generating unit.

Impairmentlossesrecognizedforanassetinprofitorlossinprioryearsarereversedwhenthereisanyindicationthattheimpairmentnolongerexistsorhasdecreased.Anyreversalispostedtoprofitorloss.Areinstatementorreversaloftheimpairmentlossrecordedonanassetcannot,however,exceedtheamortizedcostthatwouldhavebeenrecognizedwith-outtheimpairment.Impairmentlossesrecognizedongoodwillarenotreversed.

Financial assetsaredividedintothefollowingcategories:(a)held-to-maturityfinancialassets,(b)financialassetsatfairvaluethroughprofitorloss,(c)available-for-salefinancialassets,and(d)loansandreceivablesoriginatedbytheentity.Financialassetswithfixedordeterminablepaymentsandfixedmaturitythattheentityhasthepositiveintentionandabilitytoholdtomaturity,otherthanloansandreceivablesoriginatedbytheentity,areclassifiedasheld-to-maturityinvestments.Financialassetsclassifiedas“atfairvaluethroughprofitorloss”are(i)financialassetsthatareacquiredprincipallyforthepurposeofgeneratingaprofitfromshort-termfluctuationsinpriceorexchangeratesor(ii)financialassetsdesignateduponinitialrecognitionasatfairvaluethroughprofitorloss.Allotherfinancialassetsapartfromloansandreceivablesoriginatedbytheentityareclassifiedasavailable-for-salefinancialassets.

Held-to-maturityinvestmentsaredisclosedundernon-currentassetsunlesstheyareduewithintwelvemonthsofthereport-ing date. Financial assets held for trading are disclosed under current assets. This does not apply to derivatives that lead topaymentsinmorethantwelvemonthsafterthereportingdate.Theyaredisclosedundernon-currentfinancialassetsorliabilities.Financialassetsdesignateduponinitialrecognitionasatfairvaluethroughprofitorlossandavailable-for-salefinancialassetsaredisclosedascurrentassetsifmanagementintendstosellthemwithintwelvemonthsoftheendofthereportingperiod.TheyarerecognizedatthedatewhentheWürthGroupentersintoacontract.

Theinitialrecognitionofafinancialassetisatcost,whichcorrespondstothefairvalueoftheconsiderationgiven.Trans-actioncostsareincluded,exceptforfinancialassetsdesignateduponinitialrecognitionasatfairvaluethroughprofitorlossorclassifiedasheld-for-trading.

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Held-to-maturityinvestmentsaremeasuredatamortizedcostusingtheeffectiveinterestmethod.Ifitislikelythatfinancialassetsmeasuredatamortizedcostareimpaired,theimpairmentlossisrecognizedinprofitorloss.Animpairmentlossrecordedpreviouslyasanexpenseisadjustedinprofitorlossifthesubsequentreversaloftheimpairmentloss(orreduc-tionintheimpairmentloss)canbeobjectivelyattributedtocircumstancesthataroseaftertheoriginalimpairmentloss.Areversaloftheimpairmentlossis,however,onlyrecognizedtotheextentthatitdoesnotexceedtheamortizedcostthatwouldhavebeenrecognizedwithouttheimpairment.

Available-for-salefinancialassets,financialassetsthatareclassifiedasheldfortrading,andfinancialassetsatfairvaluethroughprofitorlossaresubsequentlymeasuredatfairvalueonthebasisofmarketpricesasofthereportingdatewithoutdeductinganytransactioncosts.Forfinancialinstrumentswherethereisnoactivemarket,fairvalueisdeterminedusingvaluationtechniques.Suchtechniquesincludeusingrecentarm’slengthmarkettransactions,discountedcashflowanalysisor other valuation models.

Gainsandlossesfrommeasurementofanavailable-for-salefinancialassetatfairvaluearerecognizeddirectlyinequity.Changesinthefairvalueoffinancialassetsheldfortradingandfinancialassetsatfairvaluethroughprofitorlossarerecognizedinthenetincomeorlossfortheperiod.

Loansandreceivablesoriginatedbytheentityandnotheldfortradingarerecognizedatamortizedcost.

Anynecessaryimpairmentlossesarerecognizedbydeductingtheamountsdirectlyfromtheunderlyingreceivables.

Derivative financial instruments areclassifiedasheld-for-tradingfinancialassets/financialliabilities,unlesstheyareincludedinhedgeaccountingashedginginstruments.Thechangeinthefairvalueofthederivativefinancialinstrumentsisrecognizedintheconsolidatedincomestatement.Thefairvalueofopenderivativefinancialinstrumentsisdisclosedunderotherassets/liabilities.

Receivables and liabilities from financial servicesincludeallreceivablesandliabilitiesarisingfromthefinancialser-vicesbusiness.Bankreceivablesandloans,aswellasreceivablesorloansduefromcustomers,arefinancialinvestmentswithfixedordeterminablepaymentsandfixedmaturitythatarenotquotedinanactivemarket.Afterinitialrecognition,receivablesandliabilitiesfromfinancialservicesarecarriedatamortizedcostusingtheeffectiveinterestmethodlessanyallowanceforimpairment.Loansinthebankingbusinessaretestedforimpairment.TheWürthGroupsellsreceivablesfromfinancialservicestofactorsinasset-backedcommercialpapers(ABCP)transactions.Notwithstandingthetransferoftitletothereceivablesfromfinancialservices,thesemustcontinuetoberecognizedbytheWürthGroupwhereGroupentitiesretainsignificantrisksandrewardsonacontractualbasis.

Interest-freeandlow-interestloans are stated at present value.

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Actual income taxes arecalculatedbasedonthetaxableincomeinthefiscalyearandinaccordancewithnationaltaxlegislation.Additionaltaxpayments/refundsthatareexpected,orhaveactuallybeenmade,forpreviousyearsarealsoincluded.

Deferred taxes resultfromtemporarydifferencesbetweentheIFRScarryingamountsandthetaxaccountsoftheindi-vidualentities(exceptfordifferencesfromgoodwillarisinguponacquisitionofshares)andfromconsolidationentries.Deferredtaxassetsalsoincludetaxcreditsthatresultfromtheexpectedutilizationofexistinglosscarryforwardsinsubse-quentyears.Deferredtaxassetsforrecognitionandmeasurementdifferencesandforunusedtaxlossesareonlytakeninto account if they are expected toberealized.Deferredtaxesaremeasuredonthebasisoftherespectivelocalincometaxrates.DeferredtaxassetsanddeferredtaxliabilitiesareoffsetifaGroupentityhasalegallyenforceablerighttooff-set current tax assets and current tax liabilities and these relate to income taxes levied by the same taxation authority on thesametaxableentity.Deferredtaxesrelatingtoitemsrecognizeddirectlyinequityarealsoposteddirectlytoothercomprehensive income. Other deferred taxes are posted to the consolidated income statement.

Inventories are stated at costs of purchase or costs of conversion. Costs of conversion contain directly allocable costs (suchasdirectmaterialsandlabor)andfixedandvariableproductionoverheads(suchasmaterialsandproductionover-heads)includingappropriatedepreciationoftheproductionplantbasedonordinarycapacityutilizationand,inthecaseofqualifyingassets,borrowingcosts.

Thecarryingamountsarecalculatedusingtheweightedaveragecostmethod.

Risksinherentininventoriesfromreducedsaleabilityareaccountedforbyrecognizingappropriatewrite-downstothelowerofcostornetrealizablevalue.

Payments on account received from customers are recorded as liabilities.

Receivables and other assets aremeasuredatamortizedcost.Allowancesaremadeforimpairmentbasedonindi-vidualriskestimatesandpastexperienceofrecoverability.Todeterminespecificallowances,financialassetsthatcouldpotentiallybeimpairedaregroupedtogetherbysimilarcreditriskcharacteristicsandcollectivelyassessedforimpairment.Impairmentlossesontradereceivablesarerecognizedviaaprovisionforimpairmentinsomecases.Thedecisionofwhethertoaccountforacreditriskbyusingaprovisionforimpairmentorbyrecognizingalossdirectlyonthereceivabledependsupontheabilitytoaccuratelyassesstheriskinvolved.Onaccountofthedifferentbusinessfieldsandregionalconditions, this assessment is at the discretion of the individuals in charge of the respective portfolios.

Asalessor,theWürthGrouprecognizesfinancelease assetsasreceivablesinthestatementoffinancialpositionequaltotheunsoldnetinvestmentinthelease.Financialincomeisrecognizedtoreflectaconstantperiodicrateofreturnonthelessor’snetinvestmentoutstanding.Initialdirectcostsareimmediatelyexpensed.Incomeonunsoldcontractsisrecognizedoverthetermofthelease.Leasesthatdonotessentiallytransferalltherisksandrewardsassociatedwithownershipfrom the Würth Group to the lessee are classed as operating leases. Initial direct costs incurred during the negotiation

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and conclusion of an operating lease are added to the carrying amount of the leased asset and recorded as an expense duringthetermoftheleaseinthesamewayasleasingincome.Conditionalrentalpaymentsarerecognizedasincomeduringtheperiodinwhichtheyaregenerated. Securities areclassifiedasfinancialassetsheldfortradingordesignateduponacquisitionasfinancialassetsatfairvaluethroughprofitorlossandmarkedtomarketonthereportingdate.Highlyliquidsecuritiesclassifiedascurrentassetsaresecuritiesduewithinthreemonthsofthedateofacquisition.Theyarereportedasshort-terminvestmentsundercashand cash equivalents.

Cash and cash equivalents includecash,demanddepositsandshort-terminvestments(e.g.moneymarketfunds).

Non-controlling interests include non-controlling interests in share capital, in reserves and in retained earnings unless theyqualifyasliabilitiesasdefinedbyIAS32.Ifthelatteristhecase,theyaredisclosedunderfinancialliabilitiesandchangesinthefairvaluearerecognizedwithinthefinancialresult.

Post-employment benefit obligationsfordefinedbenefitplansarecalculatedusingtheprojectedunitcreditmethod.Futureobligationsaremeasuredusingactuarialmethods.Takingaccountofdynamiccomponents,thefuturebenefitobli-gationsarespreadovertheentireperiodofservice.Actuarialcalculationsandestimatesmustbeobtainedforallbenefitplans.Actuarialgainsandlossesforthedefinedbenefitplanarerecognizedinfullinothercomprehensiveincomeintheperiodinwhichtheyoccur.Suchactuarialgainsandlossesarealsoimmediatelyrecognizedinrevenuereservesandarenotreclassifiedtoprofitorlossinsubsequentperiods.

Thedefinedbenefitassetorliabilitycomprisesthepresentvalueofthedefinedbenefitobligation(usingadiscountratebasedonhigh-qualitycorporatebonds)andthefairvalueofplanassetsoutofwhichtheobligationsaretobesettled.Planassetsareassetsthatareheldbyalong-termemployeebenefitfundorqualifyinginsurancepolicies.PlanassetsarenotavailabletothecreditorsoftheGroup,norcantheybepaiddirectlytotheGroup.Fairvalueisbasedonmarketpriceinformationand,inthecaseofquotedsecurities,itisthepublishedbidprice.Thevalueofanydefinedbenefitassetrecognizedisrestrictedtothepresentvalueofanyeconomicbenefitsavailableintheformofrefundsfromtheplanorreductions in the future contributions to the plan.

Inthecaseofdefinedcontributionplans,therespectiveentitypayscontributionstostateorprivatepensioncompanieseitherasrequiredbylaworonavoluntarybasis.Nofurtherpaymentobligationsariseforthecompanyfromthepaymentofcontributions.Theamountsarerecognizedinprofitorlossinfull.

Provisions are created for all legal or constructive obligations to third parties as of the reporting date that relate to past events,willprobablyleadtoanoutflowofresourcesinthefuture,andwhoseamountcanbereliablyestimated.Provisionsarereviewedateachreportingdateandadjustedtoreflectthecurrentbestestimate.Wheretheeffectofthetimevalueofthe money is material, the amount of a provision is the present value of the expenditures expected to be required to settle theobligation.Inthediscountingprocess,theincreaseintheprovisionreflectingthepassageoftimeisrecognizedasfinancecosts.Reversalsofprovisionsarepostedagainsttheexpenseitemsforwhichtheprovisionsweresetup.

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When measuring financial liabilities,adistinctionismadebetween(a)financialliabilitiesheldfortrading,and(b)otherfinancialliabilities.

Derivativefinancialinstrumentsareclassifiedasheld-for-tradingfinancialliabilitiesandmeasuredatfairvalue.However,anexceptionismadeforderivativesrelatedtonon-listedequityinstrumentswhosefairvaluecannotbereliablydeter-mined and that can only be settled through their delivery. These are measured at cost.

Otherfinancialliabilitiesaremeasuredatamortizedcostusingtheeffectiveinterestratemethod.Thisusuallycorrespondsto the repayment or settlement value or, in the case of obligations similar to pension obligations, to the present value. If non-controllinginterestsareclassifiedasliabilitiesasdefinedbyIAS32,theyaremeasuredatfairvalue.

TheWürthGroupmeasuresfinancialinstrumentsandnon-financialassetsatfair value on every reporting date. The fair valueisthepricethatwouldbepaid,intheeventofadueandpropertransaction,betweenmarketparticipantsonthecalculationcut-offdateforthesaleofanasset/transferofaliability.Allassetsandliabilitiesforwhichthefairvalueiscal-culatedorisreportedinthefinancialstatementsareallocatedtothefairvaluehierarchydescribedbelow.Level1–Priceslistedonactivemarketsforidenticalassetsandliabilities,Level2–Valuationproceduresinwhichthelowestlevelinputparameterthatisrelevanttovaluationatfairvalueasa

wholecanbedirectlyorindirectlyobservedonthemarket,Level3–Valuationproceduresinwhichthelowestlevelinputparameterthatisrelevanttovaluationatfairvalueasa

wholecannotbeobservedonthemarket.

Financial guarantee contracts issued by the Würth Group are those contracts that require a payment to be made to reimbursetheholderforalossitincursbecausethespecifieddebtorfailstomakeapaymentwhendueinaccordancewiththetermsofadebtinstrument.ThesefinancialguaranteecontractsaretreatedasinsurancecontractsasdefinedbyIFRS4,i.e.,thefinancialguaranteecontractsarepresentedascontingentliabilitiesuntilutilizationbecomesprobable.Whenthisisthecase,thecorrespondingobligationisrecognized.

Salesarerecognizedwhenitisprobablethattheeconomicbenefitsassociatedwiththetransactionwillflowtotheentityand the level of sales can be measured reliably. Sales are recorded net of general VAT and any price reductions and quantitydiscountswhendeliveryhastakenplaceandtherisksandrewardsincidentaltoownershiphavebeentransferredin full.

Revenue from financial services isrecognizedwhenitisrealizedorrealizableandearned.Interestfrominterest-bear-ingassetsandliabilitiesisrecognizedproportionatelyoverthetermoftheassetsorliabilitiesconcernedusingtheeffectiveinterestmethodandtakingintoaccountanydeferredchargesandfeesaswellaspremiumsordiscounts.Commissionisrecognizedwhenthereissufficientevidencethatanagreementexists,theperformancehasbeenrendered,thefeeorcommissionhasbeenfixed,andcollectabilityissufficientlycertain.

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Lease payments underanoperatingleasearerecognizedasanexpenseintheconsolidatedincomestatementonastraight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern of the benefitfortheentityaslessee.Aleaseisclassifiedasanoperatingleaseiftheleasedoesnottransfersubstantiallyallrisksandrewardsincidentaltoownershiptotheentity.

FinanceleaseswiththeWürthGroupaslessee,whichessentiallytransferalltherisksandrewardsincidentaltoownershipoftheleasedassettotheWürthGroup,arecapitalizedatthecommencementoftheleaseatthefairvalueoftheleasedassetor,iflower,atthepresentvalueoftheminimumleasepayments.Leasepaymentsareapportionedbetweenfinancecharges and a reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability.Financecostsarerecognizedintheincomestatement.Aleasedassetisdepreciatedovertheusefullifeoftheasset.However,ifthereisnoreasonablecertaintythattheWürthGroupwillobtainownershipbytheendoftheleaseterm, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.

Thedeterminationofwhetheranarrangementis,orcontains,aleaseisbasedonthesubstanceofthearrangementatinceptiondateandanassessmentofwhetherthefulfillmentofthearrangementisdependentontheuseofaspecificassetor assets or the arrangement conveys a right to use the asset. For arrangements entered into prior to January 1, 2005, the dateofinceptionisdeemedtobeJanuary1,2005inaccordancewiththetransitionalprovisionsofIFRIC4.

Government grants arenotrecognizeduntilthereisreasonableassurancethattheentitywillcomplywiththeconditionsattachedtothegrantandthattheentitywillinfactreceiveit.Governmentgrantsarerecognizedinprofitorlossassched-uledinlinewiththerelatedexpensesthataresubsidizedbythegrants.Ifgrantsareissuedforthepurchaseofproperty,plant or equipment, the grants are treated as a reduction of the cost of those assets.

Contingent liabilities arepossibleorpresentobligationsarisingfrompasteventswhicharenotlikelytoresultinanout-flowofresourcesandarethusnotrecordedinthestatementoffinancialposition.Theamountsstatedcorrespondtothepotential liability as of the reporting date.

Subsequent events thatprovideadditionalinformationaboutthesituationafterthereportingdatearereflectedinthestatementoffinancialposition.Subsequenteventsthatdonotresultinanyadjustmentsarereportedinthenoteswherematerial.

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G. Notes on the consolidated income statement

[1] Sales

in millions of EUR 2015 2014Revenue from the sale of goods and services 10,940.5 10,024.1Revenuefromfinancialservices 106.3 102.3Total 11,046.8 10,126.4

RevenuefromfinancialservicesprimarilycontainsinterestincomeofEUR37.2million(2014:EUR40.2million),similarincome of EUR 10.0 million (2014: EUR 10.6 million) and commission income of EUR 14.6 million (2014: EUR 13.0 million) fromInternationalesBankhausBodenseeAG,Friedrichshafen,Germany.Italsoincludesincomefromtheleasingbusiness.

Revenue from the sale of goods and services contains revenue from services of EUR 80.2 million (2014: EUR 86.0 million).

[2] Cost of materials

in millions of EUR 2015 2014Cost of materials and supplies and of purchased merchandise 5,204.6 4,667.1Cost of purchased services 218.8 198.4Total 5,423.4 4,865.5

[3] Cost of financial services

ThecostoffinancialservicesprimarilycontainsinterestexpensesofEUR10.6million(2014:EUR13.0million)andcommis-sionofEUR6.6million(2014:EUR6.1million)fromInternationalesBankhausBodenseeAG,Friedrichshafen,Germany.ThisitemalsocontainsEUR3.0million(2014:EUR1.9million)fromtheexternalbusinessofthecompaniesspecializinginleases and EUR 18.0 million from the external business of the insurance company.

[4] Other operating income

Otheroperatingincomeprincipallyincludesincomefromthesaleofothergoodsandservicesaswellasincomefromthedisposalofassets.Theyear-on-yearincreaseofEUR86.0millionisduetoinsurancesettlementsinconnectionwithfiredamage in the Electronics unit.

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[5] Personnel expenses and number of employees

Personnel expenses

in millions of EUR 2015 2014Wages and salaries 2,520.3 2,320.9Social security 332.6 305.4Pensionandotherbenefitcosts 239.1 219.2Total 3,092.0 2,845.5

Number of employees as of the reporting date

2015 2014Würth Line Germany 7,627 7,498Allied Companies Germany 13,518 12,728Würth Group Germany 21,145 20,226Würth Group International 47,833 45,818Würth Group total 68,978 66,044Thereof

Salesstaff 31,080 29,923In-housestaff 37,898 36,121

The average headcount of the Würth Group totaled 68,009 in the reporting period (2014: 65,104).

[6] Other operating expenses

Other operating expenses mainly include selling, administration and operating expenses, bad debts and other taxes.

OtheroperatingexpensesalsoincludeimpairmentofreceivablesfromthebankingbusinessofEUR8.5million(2014:EUR 11.5 million).

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[7] Finance revenue / finance costs

in millions of EUR 2015 2014Other interest and similar income 39.5 42.5Interest and similar expenses 90.3 90.5Net interest cost from pension plans 4.7 5.7Total financial result 55.5 53.7ThereoffromfinancialinstrumentsundertheIAS39measurementcategories:

Held-to-maturity investments (HtM) 0.0 0.1Financial assets held for trading (FAHfT) 9.4 32.4Financialassets(designatedas)atfairvaluethroughprofitorloss(FAFVtpl) 1.2 1.3Loans and receivables (LaR) 20.1 8.7Financial liabilities held for trading (FLHfT) – 19.3 – 17.0Financialliabilitiesatamortizedcost(FLAC) – 62.2 – 73.5

Expenses from the translation of foreign currency items amounted to EUR 8.9 million in 2015. In the previous year, the translation of foreign currency items resulted in income of EUR 8.5 million.

Thenetgainsorlossesfromfinancialassets/liabilitiesheldfortradingincludethenetgainsorlossesfromchangesinfairvalueaswellasinterestincomeandexpensesfromthesefinancialinstruments.Thenetgainsorlossesfromloansandreceivableschieflyincludetheeffectsofimpairmentsandreversalsofimpairmentlosses.

[8] Earnings before taxes – reconciliation to the operating result of the Würth Group*

in millions of EUR 2015 2014Earnings before taxes 516.0 500.0Impairmentlossesforgoodwillandbrands 3.4 3.5MeasurementoftheinterestsasdefinedbyIAS32 3.5 9.9Other 2.1 1.4Operating result 525.0 514.8

*NotpartoftheconsolidatedfinancialstatementsinaccordancewithIFRS

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[9] Income taxes

in millions of EUR 2015 2014Income taxes 92.6 111.4Deferred tax income

Deferred tax income from unused tax losses 34.9 45.4Other deferred tax income 52.4 33.1

Deferred tax expenseDeferred tax expense from unused tax losses 34.4 60.4Other deferred tax expenses 42.1 29.2

Total 81.8 122.5

Income taxes include corporate income tax (including solidarity surcharge) and trade tax of German entities and compa-rable income taxes of foreign entities.

AreconciliationfromthetheoreticaltothecurrenttaxratefortheWürthGroupisshownbelow:

in millions of EUR 2015 2014Earnings before taxes 516.0 500.0Theoretical tax rate as a % 18.3 18.3Theoretical tax expense 94.4 91.5Changes in theoretical tax expense due to:

Unrecognizedtaxlossesofthecurrentfiscalyear 15.3 22.1Recognition of unused tax losses from prior periods – 3.1 – 6.7Write-downonrecognizedunusedtaxlossesfromprioryears 0.6 4.1Write-downontemporarydifferences – 1.7 0.3Differenttaxrates 2.0 0.3Tax reductions due to tax-free items – 2.2 – 2.5Tax increases due to non-deductible expenses 5.3 6.6Income tax expense that cannot be derived from earnings before taxes 0.7 4.7Non-tax-deductibleamortizationofgoodwillandotherintangibleassets 0.4 1.0Taxes relating to other periods – 28.7 0.5Other – 1.2 0.6

Income taxes 81.8 122.5Effective tax rate as a % 15.9 24.5

Thetheoreticaltaxrateisbasedontheweightedaveragetaxrateofallconsolidatedentities.ChangesinincometaxeswereprimarilyattributabletotaxreimbursementsrelatingtootherperiodsinGermany.TherecognitionofunusedtaxlossesfromprioryearsincludesEUR2.1million(2014:EUR4.0million)fromtheuseofdeferredtaxassetswrittendowninprior years.

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H. Notes on the consolidated statement of financial position

[10] Intangible assets including goodwill

in millions of EUR

Franchises, industrial

rights, licenses and similar rights

Internally generated intangible

assets

Customer relationships

and similar assets Goodwill

Payments on account Total

CostJanuary 1, 2015 268.0 77.2 185.0 247.3 4.9 782.4Exchangedifferences 2.5 0.9 1.1 4.6 0.0 9.1Changes in the consolidated group 74.5 0.0 96.5 238.3 0.1 409.4Additions 23.0 4.6 0.2 0.0 6.0 33.8Disposals 3.3 1.5 1.1 0.0 0.2 6.1Reversal of impairment losses 0.1 0.0 0.0 0.0 0.0 0.1Reclassifications 1.8 3.3 0.0 0.0 – 1.8 3.3December 31, 2015 366.6 84.5 281.7 490.2 9.0 1,232.0

Accumulated depreciation and impairmentJanuary 1, 2015 194.0 57.6 135.6 184.1 0.1 571.4Exchangedifferences 2.4 0.9 0.4 3.7 0.0 7.4Amortizationanddepreciation 27.3 6.7 9.4 0.0 0.0 43.4Impairment losses 0.0 0.0 2.5 3.4 0.0 5.9Disposals 2.9 0.9 0.7 0.0 0.0 4.5December 31, 2015 220.8 64.3 147.2 191.2 0.1 623.6

Net carrying amountDecember 31, 2015 145.8 20.2 134.5 299.0 8.9 608.4

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in millions of EUR

Franchises, industrial

rights, licenses and similar rights

Internally generated intangible

assets

Customer relationships

and similar assets Goodwill

Payments on account Total

CostJanuary 1, 2014 233.1 70.4 179.5 238.8 12.8 734.6Exchangedifferences 1.7 0.2 0.6 4.5 – 0.3 6.7Changes in the consolidated group 3.7 0.0 4.9 4.0 0.0 12.6Additions 25.0 10.5 1.6 0.0 3.8 40.9Disposals 6.1 5.7 1.7 0.0 0.7 14.2Reclassifications 10.6 1.8 0.1 0.0 – 10.7 1.8December 31, 2014 268.0 77.2 185.0 247.3 4.9 782.4

Accumulated depreciation and impairmentJanuary 1, 2014 172.0 48.0 130.7 180.4 0.1 531.2Exchangedifferences 1.5 0.2 0.4 3.5 0.0 5.6Amortizationanddepreciation 22.9 2.2 6.2 0.0 0.0 31.3Impairment losses 3.3 12.6 0.0 0.2 0.0 16.1Disposals 5.7 5.4 1.7 0.0 0.0 12.8December 31, 2014 194.0 57.6 135.6 184.1 0.1 571.4

Net carrying amountDecember 31, 2014 74.0 19.6 49.4 63.2 4.8 211.0

Researchanddevelopmentcosts(includingamortizationofcapitalizeddevelopmentcosts)recognizedasexpensestotaled EUR 6.8 million (2014: EUR 14.6 million).

Goodwillcontainsamountsfromassetdealsaswellasfromsharedeals.

Goodwillistestedforimpairmentannually.Thetestisbasedonestimatedfuturecashflowsderivedfromthebusinessplan.

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Theimpairmentlossesinthe2015fiscalyearrelatetocustomerrelationshipsandsimilarassetsintheamountofEUR2.5million(2014:EUR0.0million)andtogoodwillintheamountofEUR3.4million(2014:EUR0.2million).Theseimpairmentlosseswererecognizedprimarilyonentitiesthatarebeinghitbyasharpfallindemandonaccountofthecurrenteco -nomicsituation.Inthe2014fiscalyear,theimpairmentlosseswereattributabletofranchises,industrialrights,licensesandsimilarrights(2014:EUR3.3million)andtointernallygeneratedintangibleassets(2014:EUR12.6million).GoodwillwasregularlytestedforimpairmentinaccordancewithIAS36inthefiscalyear2015.Theimpairmenttestswerebasedonnetselling price and conducted at the level of the smallest cash-generating unit.

Theimpairmentlosseswererecognizedunderamortizationanddepreciation.

Thetablebelowprovidesasummaryofthetestedgoodwillandtheassumptionsunderlyingtheimpairmenttests:

2015 in millions of EUR

NorthernSafety Com-pany,

Inc.

PARA-VAN

GmbHMEF S.r.l. Tunap

HSR/Ind-

unorm

Chemo-fast

Anchor-ing

GmbH

Lichtzen-trale

Thurner GmbH

WurthDes

MoinesBolt Inc.

Diffu-therm/

Dinol Other Total

Goodwillbefore impairment test 181.7 22.9 17.6 9.2 9.1 8.7 6.8 6.4 6.2 32.9 301.5Exchangedifference 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.9 0.9Impairment losses 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 3.4 3.4Goodwill 181.7 22.9 17.6 9.2 9.1 8.7 6.8 6.4 6.2 30.4 299.0Averagesalesgrowthin the planning period (%) 7.1 31.3 6.4 4.2 6.5 6.6 5.0 10.0 8.7 –1.4–13.0

EBIT margin in the planning period (%) 4.9–8.2 –1.7–21.4 1.6–2.0 6.5–8.2 5.2–5.7 7.2–8.0 2.3–3.1 10.8–15.7 5.2–6.7 0.5–22.4

Length of the planning period 4 years 4 years 4 years 4 years 4 years 4 years 4 years 4 years 4 years 4 yearsSalesgrowthp.a. after the end of the planning period (%) 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0

EBIT margin after the end of the planning period (%) 8.2 21.4 2.0 8.2 5.7 7.2 3.1 15.7 6.7 2.6–22.4Discount rate 12.8 10.6 15.9 9.8 9.7 9.8 9.7 13.0 9.6 8.9–34.6Additional impairment losses

assuming a 10 % lowercashflow 0.0 0.0 0.0 0.0 0.0 0.9 0.0 0.0 5.9 0.0

assuming a 1% higher discount rate 0.0 0.0 0.0 0.0 0.0 2.1 0.0 0.0 6.2 0.0

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2014 in millions of EUR

AP Winner

LTDALichtzentrale

Thurner GmbH Tunap

Chemofast Anchoring

GmbHDiffutherm/

Dinol

TOGE DübelGmbH &

Co. KG Other Total

Goodwillbefore impairment test 2.0 6.8 9.2 8.7 6.2 4.0 25.5 62.4Exchangedifference 0.0 0.0 0.0 0.0 0.0 0.0 1.0 1.0Impairment losses 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2Goodwill 2.0 6.8 9.2 8.7 6.2 4.0 26.3 63.2Averagesalesgrowthin the planning period (%) 17.3 4.7 0.7 7.3 8.3 24.2 1.4–18.2

EBIT margin in the planning period (%) 4.2–8.7 2.3–3.5 7.3–8.7 8.7–9.4 5.2–7.1 10.2–12.9 0.5–21.8

Length of the planning period 4 years 4 years 4 years 4 years 4 years 4 years 4 yearsSalesgrowthp.a. after the end of the planning period (%) 1.0 1.0 1.0 1.0 1.0 1.0 1.0

EBIT margin after the end of the planning period (%) 4.2 3.5 8.6 9.4 7.1 12.9 2.3–21.8Discount rate 29.8 9.6 10.0 9.9 9.7 10.9 9.5–15.3Additional impairment losses

assuming a 10 % lowercashflow 0.0 0.0 0.0 0.0 2.5 0.0 0.4

assuming a 1% higher discount rate 0.0 0.0 0.0 0.0 4.0 0.0 1.0

The assumptions underlying the calculation of the net selling price are most sensitive to estimation uncertainties regard-ingsalesgrowth,EBITmarginsandthediscountratesused.

TheassumptionsconcerningsalesgrowthandEBITmarginsusedfortheimpairmenttestsintheplanningperiodarebasedon internal records of past experience and assumptions by management used in the business plans valid as of the report-ing date.

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Discountratesreflectthecurrentmarketassessmentoftherisksspecifictoeachcash-generatingunit.Thediscountratewasestimatedbasedontheweightedaveragecostofcapitalfortheindustry.Thisratewasfurtheradjustedtoreflectthemarketassessmentsofanyrisksspecifictothecash-generatingunitsforwhichfutureestimatesofcashflowshavenotbeenadjusted.

Withregardtotheassessmentofvalueinuseofthecash-generatingunits,managementbelievesthat–withtheexceptionofthosecash-generatingunitswhereimpairmentlosseswererecognized–noreasonablypossiblechangeinanyoftheabovekeyassumptionsmadetodeterminethenetsellingpricewouldcausethecarryingamountofthecash-generatingunit to materially exceed its recoverable amount.

[11] Property, plant and equipment

in millions of EUR

Land, land rights and buildings

incl. buildings on third-party land

Technical equipment and

machines

Other equipment,

furniture and fixtures

Payments on account and assets under construction Total

CostJanuary 1, 2015 2,253.9 794.9 1,629.8 132.3 4,810.9Exchangedifferences 15.5 8.1 13.8 – 0.2 37.2Changes in the consolidated group 11.8 1.9 13.1 8.3 35.1Additions 53.1 79.8 169.8 184.8 487.5Disposals 25.8 32.1 105.1 3.0 166.0Reclassifications 53.3 57.5 29.2 – 143.4 – 3.4December 31, 2015 2,361.8 910.1 1,750.6 178.8 5,201.3

Accumulated depreciation and impairmentJanuary 1, 2015 840.1 542.3 920.4 0.1 2,302.9Exchangedifferences 6.3 7.0 11.1 0.0 24.4Amortizationanddepreciation 65.1 54.1 117.6 0.0 236.8Impairment losses 10.5 35.0 0.0 0.0 45.5Disposals 38.5 28.6 70.9 0.0 138.0Reclassifications 0.0 1.3 – 1.3 0.0 0.0Reversal of impairment losses 0.0 2.5 1.2 0.0 3.7December 31, 2015 883.5 608.6 975.7 0.1 2,467.9

Net carrying amountDecember 31, 2015 1,478.3 301.5 774.9 178.7 2,733.4

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in millions of EUR

Land, land rights and buildings

incl. buildings on third-party land

Technical equipment and

machines

Other equipment,

furniture and fixtures

Payments on account and assets under construction Total

CostJanuary 1, 2014 2,143.9 745.0 1,551.8 119.7 4,560.4Exchangedifferences 8.6 4.8 7.5 – 4.6 16.3Changes in the consolidated group 9.1 11.4 1.6 3.7 25.8Additions 42.5 39.4 124.7 108.6 315.2Disposals 5.0 28.3 64.3 7.3 104.9Reclassifications 54.8 22.6 8.5 – 87.8 – 1.9December 31, 2014 2,253.9 794.9 1,629.8 132.3 4,810.9

Accumulated depreciation and impairmentJanuary 1, 2014 772.3 511.6 861.9 2.7 2,148.5Exchangedifferences 3.7 4.1 6.3 0.0 14.1Amortizationanddepreciation 64.6 53.8 110.7 0.0 229.1Impairment losses 0.0 0.0 0.0 1.0 1.0Disposals 0.6 26.2 57.7 3.6 88.1Reclassifications 0.1 – 1.0 0.9 0.0 0.0Reversal of impairment losses 0.0 0.0 1.7 0.0 1.7December 31, 2014 840.1 542.3 920.4 0.1 2,302.9

Net carrying amountDecember 31, 2014 1,413.8 252.6 709.4 132.2 2,508.0

Theinvestmentsinproperty,plantandequipmentrelatetonewpurchasesinconnectionwiththefiredamageintheElec-tronics unit amounting to EUR 54.2 million. Since the carrying amounts exceed the recoverable amount due to the invest-mentsmade,animpairmentlossofEUR45.5millionwasrecognizedintheElectronicsunitinthe2015fiscalyear(2014:EUR1.0million).Therecoverableamountwascalculatedasthefairvaluelesscoststosell,applyingadiscountrateof8.3 % based on the current business plans.

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Therearerestrictionsontherightsofdisposalofproperty,plantandequipmentandassetsassignedascollateral,whichcanbebrokendownasfollows:

in millions of EUR 2015 2014Land charges 16.2 108.6Collateral assignment 5.6 4.0Total 21.8 112.6

There are payment obligations of EUR 19.1 million (2014: EUR 26.8 million) for capital expenditures on non-current assets.

Payments on account and assets under construction contain assets under construction of EUR 133.5 million (2014: EUR 103.6 million)whichrelatetotechnicalequipmentandmachinesaswellasbuildings.

[12] Financial assets

Theinvestmentsdisclosedunderfinancialassetsbelongtotheavailable-for-salecategory.Theyaregenerallymeasuredatfairvaluewithoutanyeffectonprofitorloss.Therewerenoadjustmentstofairvalueinfiscalyear2015whichwouldrequireunrealizedgainsandlossestoberecognizedinequity.Wherefairvaluecouldnotbedeterminedbecausetherewasnoactivemarketorsuitablevaluationtechnique,theinvestmentwasmeasuredatamortizedcost.Thisitemalsoincludesheld-to-maturityinvestments,whichareaccountedforatamortizedcost.FairvaluesthatcouldnotbedeterminedonthebasisofobservablemarketdataofEUR15.4million(2014:EUR21.1million)relatetolong-terminterestsinnon-listed corporations and partnerships.

InternationalesBankhausBodenseeAG,Friedrichshafen,Germany,providedsecuritieswithacarryingamountofEUR15.0million(2014:EUR15.0million)ascollateralforloansgrantedbyL-Bank,Karlsruhe,Germany.Themaximumcreditriskistheamountcarriedinthestatementoffinancialposition.

[13] Receivables from financial services

in millions of EUR 2015Thereof due

withinoneyear 2014Thereof due

withinoneyearReceivables from the leasing business 333.0 128.8 304.3 119.6Receivables from the insurance business 1.9 1.9 1.8 1.8Receivablesfromthebankingbusiness

Receivables from customers 1,045.0 544.7 1,073.4 550.5Receivablesfrombanks 58.0 58.0 30.5 30.5Other asset items 2.1 2.1 2.2 2.2

Total 1,440.0 735.5 1,412.2 704.6

ReceivablesfromfinancialservicesincludereceivablesfromrelatedpartiesofEUR16.9million(2014:EUR8.7million).

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TheWürthGroupregularlysellsreceivablesfromfinancialservicesarisingfromtheexternalleasingbusinessintheformofABCPtransactions.AsofDecember31,2015,factoredreceivablesfromfinancialservicesofEUR94.6million(2014:EUR72.9million)werenotderecognizedfromtheconsolidatedstatementoffinancialpositionbecausealltherisksandrewardsincidentaltoownershipwereessentiallyretainedbytheWürthGroup.Thecorrespondingliabilityisdisclosedunder[23]“Liabilitiesfromfinancialservices”.

Ofthereceivablesfromfinancialservices,anamountofEUR1.7million(2014:EUR0,0million)hasbeenpledgedascollateralforrefinancingatDeutscheBundesbank,FrankfurtamMain,Germany,andEUR29.3million(2014:EUR32.5million)ascollateralforagloballoanatL-Bank,Karlsruhe,Germany.

Thefollowingtableprovidesinformationontheextentofthecreditriskincludedinreceivablesfromfinancialservices.

in millions of EUR 2015 2014Receivablesfromfinancialservicesthatareneitherpastduenorimpaired 1,405.4 1,359.4Receivables not impaired but past due by

less than 120 days 18.6 35.9between120and179days 0.3 0.1between180and359days 0.3 0.1more than 360 days 0.9 0.8

Total receivables not impaired 1,425.5 1,396.3Impairedreceivablesfromfinancialservices(gross) 37.5 48.7Impairmentlossrecognizedonreceivablesfromfinancialservices 23.0 32.8Net carrying amount 1,440.0 1,412.2

Withrespecttothereceivablesfromfinancialservicesthatwereneitherimpairednorpastdue,therewasnoindicationasofthereportingdatethatthedebtorswouldnotmeettheirpaymentobligations.

Most of the receivables that are past due but not impaired are secured.

Movementsintheprovisionforimpairmentofreceivablesfromfinancialserviceswereasfollows:

in millions of EUR 2015 2014Provision for impairment as of January 1 32.8 35.6Amountsrecognizedasincome(–)orexpense(+)inthereportingperiod 9.5 14.4Derecognition of receivables – 17.0 – 17.2Paymentsreceivedandrecoveriesofamountspreviouslywrittenoff – 2.5 0.0Currencytranslationeffects 0.2 0.0Provision for impairment as of December 31 23.0 32.8

Theincomeorexpensefromimpairmentlossesandthederecognitionofreceivablesfromfinancialservicesisdisclosedunder other operating expenses.

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[14] Deferred taxes

Deferredtaxassetsandliabilitiescanbeallocatedasfollows:

in millions of EUR

Deferred tax assets

2015

Deferred tax liabilities

2015

Deferred tax assets

2014

Deferred tax liabilities

2014Change

2015Change

2014Non-current assets 59.1 94.6 56.1 49.2 – 42.4 6.4Inventories 48.3 33.0 38.3 29.6 6.6 2.3Receivables 16.8 5.2 14.0 3.0 0.6 – 7.1Other assets 27.5 54.5 17.1 42.6 – 1.5 – 1.6Provisions 59.5 21.4 56.2 21.6 3.5 11.3Liabilities 13.0 4.8 10.3 4.0 1.9 – 0.4Other liabilities 10.6 50.1 6.2 45.2 – 0.5 4.2

234.8 263.6 198.2 195.2 – 31.8 15.1Unused tax losses 24.4 24.0 0.4 – 13.9Netting – 122.4 – 122.4 – 96.4 – 96.4 –Total 136.8 141.2 125.8 98.8 – 31.4 1.2

Thedevelopmentoftimingdifferencesisfullyreflectedinincometaxes.Oneexceptionrelatestoforeignexchangediffer-encesofEUR–4.0million(2014:EUR–0.6million),whichwererecognizeddirectlyinequity,andadditionsofdeferredtaxesofEUR44.9million(2014:EUR0.3million)arisingfromnewacquisitions,aswellasdeferredtaxesonitemsrecordedinequitythatwerealsorecognizeddirectlyinothercomprehensiveincomeintheamountofEUR11.3million(2014: EUR 12.6 million).

There are deferred tax assets totaling EUR 23.0 million (2014: EUR 24.8 million) at entities that have a history of losses.

DeferredtaxassetsofEUR1.0million(2014:EUR2.7million)wererecordedsubsequentlyinfiscalyear2015onunusedtaxlossesofEUR12.0million(2014:EUR17.9million),asitisconsideredprobablethattheywillbeusedintheWürthGroup in the future.

DeferredtaxassetsofEUR136.8millionintotal(2014:EUR125.7million)wererecognizedonunusedtaxlosses.

NodeferredtaxassetswererecognizedforunusedtaxlossesofEUR562.0million(2014:EUR537.6million)asitisnotsufficientlyprobablethattheywillberealized.

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Theseunusedtaxlossesareclassifiedbyexpirationperiodasfollows:

in millions of EUR 2015 2014Expiration of unused tax lossesNon-forfeitable 363.3 357.8Expirationwithinthenextfivetotenyears 45.2 13.9Expirationwithinthenextonetofiveyears 105.4 135.8Expirationwithinthenextyear 48.1 30.1Total unused tax losses net of deferred tax assets recognized 562.0 537.6

The unused tax losses include unused tax losses of EUR 1.5 million (2014: EUR 1.5 million) that originated prior to creation oftheconsolidatedtaxgroupandthatcannotbeuseduntiltheexistingprofitandlosstransferagreementshavebeenterminated.

NodeferredtaxeswererecognizedforaccumulatedprofitsandlossesofforeignsubsidiariesofEUR593.1million(2014:EUR521.0million).Ifdeferredtaxeshadbeenrecognizedforthesetimingdifferences,theywouldhavehadtobecalculatedexclusivelyusingthewithholdingtaxrateapplicableineachcase,possiblyincludingtheGermantaxrateof5%ondistributeddividends.Thecalculationoftheseunrecognizeddeferredtaxliabilitieswouldhavebeenunreasonablytime-consuming.

FuturedistributionstotheownersdonothaveanyotherincometaximplicationsfortheWürthGroup.

[15] Inventories

in millions of EUR 2015 2014Materials and supplies 86.3 87.5Workinprocessandfinishedgoods 165.1 159.0Merchandise 1,392.4 1,205.7Payments on account 9.6 9.9Total 1,653.4 1,462.1

Thewrite-downrecordedoninventories,whichwasrecognizedundercostofmaterialsintheconsolidatedincomestate-ment, amounts to EUR 8.8 million (2014: EUR 6.5 million).

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[16] Trade receivables

This item exclusively comprises receivables from third parties.

in millions of EUR 2015 2014Trade receivables that are neither past due nor impaired 663.8 643.5Receivables not impaired but past due by

less than 120 days 263.1 211.5between120and179days 2.2 1.9between180and359days 1.1 0.2more than 360 days 0.6 0.2

Total receivables not impaired 930.8 857.3Impaired trade receivables (gross) 648.9 550.7Provision for impairment of trade receivables 152.5 141.3Net carrying amount 1,427.2 1,266.7

Withrespecttothetradereceivablesthatwereneitherimpairednorpastdue,therewasnoindicationasofthereportingdatethatthedebtorswouldnotmeettheirpaymentobligations.

Wherepossibleandfeasible,wetakeoutcreditinsurance.

Movementsintheprovisionforimpairmentoftradereceivableswereasfollows:

in millions of EUR 2015 2014Provision for impairment as of January 1 141.3 135.6Changes in the consolidated group 7.4 1.4Amountsrecognizedasincome(–)orexpense(+)inthereportingperiod 28.6 35.2Derecognition of receivables – 23.9 – 30.4Paymentsreceivedandrecoveriesofamountspreviouslywrittenoff – 1.4 – 1.7Currencytranslationeffects 0.5 1.2Provision for impairment as of December 31 152.5 141.3

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Thefollowingtablepresentstheexpensesfromthederecognitionoftradereceivablesandincomefromrecoveriesofamountspreviouslywrittenoff:

in millions of EUR 2015 2014Expenses from the derecognition of receivables 32.7 34.9Incomefromrecoveriesofamountspreviouslywrittenoff 2.8 5.1

The income or expense from impairment losses and the derecognition of trade receivables is disclosed under other operat-ing expenses.

[17] Income tax receivables

This item records income tax receivables from tax authorities.

[18] Other financial assets



withinoneyearReceivables from related parties 47.1 33.1 74.7 57.3Derivativefinancialassets 14.7 14.7 15.0 15.0Sundryfinancialassets 106.4 106.4 88.9 88.9Total 168.2 154.2 178.6 161.2

Sundryfinancialassetsmainlyincludesupplierdiscountsandbonuses.Allotherpastduefinancialassetsaredirectlywrit-tenoffagainsttheunderlyingotherfinancialassets.

The receivables from related parties include the purchase price receivable of EUR 17.3 million (2014: EUR 20.5 million) fromthesaleofFreieSchuleAnne-SophietotheWürthFoundation,Künzelsau,Germany.Thereceivableissubjecttocustomarymarketinterestrates.

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[19] Other assets



withinoneyearSundry assets 136.0 107.3 115.9 88.7Prepaid expenses 50.6 50.6 41.0 41.0Total 186.6 157.9 156.9 129.7

Sundry assets mainly include VAT receivables and customs duties paid in advance. Prepaid expenses mainly relate to pre-paid insurance premiums and prepaid lease and rent payments.

Impairmentlosseswererecognizedonallotherassetsthatwerepastdue.

[20] Securities

On the one hand, the securities are investments in shares and bonds that are not actively traded, but managed at fair valueonaccountofinternalmanagementandperformanceevaluationsaswellasinaccordancewithadocumentedriskmanagementandinvestmentstrategy.Changesinvaluearedeterminedbyreferencetocomparablemarketvalues(level2).IncomefromchangesinvalueamountedtoEUR0.2millioninthefiscalyear(2014:EUR0.3million).AtotalamountofEUR9.3million(2014:EUR8.4million)hasbeenrecognizedinprofitorlosssincetheinstrumentsweredesig-natedasfinancialassetsatfairvaluethroughprofitorloss.Ontheotherhand,securitiesincludeactivelytradedsharesandbondsthataregroupedasavailable-for-salefinancialassets.Therewerenochangesinvalueinfiscalyear2015.Ofthesecurities,anamountofEUR66.3million(2014:EUR56.1million)waspledgedascollateralforthecreditlinegrantedforrefinancingpurposesbyDeutscheBundesbank,FrankfurtamMain,Germany.Themaximumcreditriskcorre-spondstothefairvaluerecognized.

[21] Cash and cash equivalents

Balances denominated in foreign currency are measured at the closing rate. The composition and development of cash andcashequivalentsispresentedintheconsolidatedstatementofcashflows.Themoneymarketfundswerevaluedatthecurrentmoneymarketrate.

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[22] Equity

SharecapitalcomprisesthesharecapitalofthefollowingparentcompanieswithintheGroup:

ParentcompanieswithintheGroup RegisteredofficeShare capital

in millions of EUR ShareholdersAdolf Würth GmbH & Co. KG Germany 300.8 Würth Family TrustsWürthFinanz-Beteiligungs-GmbH Germany 67.0 Würth Family TrustsWaldenburger Beteiligungen GmbH & Co. KG Germany 20.0 Würth Family TrustsWürthElektrogroßhandelGmbH&Co.KG Germany 19.6 Würth Family TrustsWürth Promotion Ges.m.b.H. Austria 0.05 Würth Private TrustWürth Beteiligungen GmbH Germany 0.04 Würth Family TrustsOther (incl. 34 general partner companies) Germany 0.93 Adolf Würth TrustTotal 408.4

Thelimitedpartners’capitalinthepartnershipscorrespondstothesharecapital.

Otherreservesincludetheprofitsearnedinprioryearsandnotyetdistributedaswellascapitalcontributionsatthepar-entcompaniesintheGroupandconsolidatedsubsidiaries.Differencesfromforeigncurrencytranslationandfromtheremeasurementofdefinedbenefitplansarealsodisclosedhere.Theindividualcomponentsofequityandtheirdevelop-mentin2015and2014areshownintheconsolidatedstatementofchangesinequity.

Non-controllinginterestsmainlyrelatetosharesheldbythirdpartiesinsubsidiariesaswellasdirectshareholdingsofmembers of the Würth family.

Distributions of EUR 96.0 million are planned for 2016.

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[23] Liabilities from financial services

2015 in millions of EUR Total

Due in < 1 year

Due in 1–5 years

Due in > 5 years

Liabilities from the leasing business 110.2 34.5 65.9 9.8Liabilities from the insurance business 2.6 2.6 0.0 0.0Liabilitiesfromthebankingbusiness 1,062.0 789.4 224.1 48.5Total 1,174.8 826.5 290.0 58.3

2014 in millions of EUR Total

Due in < 1 year

Due in 1–5 years

Due in > 5 years

Liabilities from the leasing business 75.0 29.7 45.0 0.3Liabilities from the insurance business 2.2 2.2 0.0 0.0Liabilitiesfromthebankingbusiness 1,052.0 845.4 161.0 45.6Total 1,129.2 877.3 206.0 45.9

LiabilitiesfromfinancialservicesincludeliabilitiesfromrelatedpartiesofEUR2.9million(2014:EUR1.6million).

Liabilities from the leasing business include liabilities from an ABCP transaction of EUR 94.6 million (2014: EUR 72.9 million). ThenominalamountofthisABCPtransactioncomestoEUR99.9million(2014:EUR78.0million).Anyriskitemsrelatingtoitarehedgedbyinterestswapsofthesameamountandtermassoonastheybecomeapparent.Asoftheendofthereportingperiod,thecontrastingchangesinvalueandcashflowsfromhedgedtransactionsandhedginginstrumentshadbalanced each other out.

Thetablebelowshowsthecontractuallyagreedremainingtermstomaturity:

Cashflow

in millions of EURCarrying amounts

December 31, 2015 < 1 year 1–5 years > 5 yearsLiabilities from the leasing business 110.2 46.0 70.6 10.0Liabilities from the insurance business 2.6 2.6 0.0 0.0Liabilitiesfromthebankingbusiness 1,062.0 838.4 257.5 50.2

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[24] Financial liabilities



withinoneyearBonds 1,676.1 0.0 1,315.9 157.6Liabilitiestobanks 167.4 120.8 201.4 85.3Liabilities to non-controlling interests 40.2 40.2 44.1 44.1Liabilities from leases 10.8 5.1 12.3 2.4Total 1,894.5 166.1 1,573.7 289.4

TheGrouphasfinancialliabilitiesdueinmorethanfiveyearsofEUR688.4million(2014:EUR719.4million).

Thematuritiesandtermsofthebondsrepayableandtheirfairvaluesareasfollows:

Type Amount InterestEffective interest Maturity

Treasurystock in millions

of EUR

Carrying amount in mil-

lions of EUR

Fair value in millions

of EURBond EUR 500 million 3.75 % 3.86 % 5/25/2018 0.0 498.3 552.5Bond EUR 500 million 1.75 % 1.76 % 5/21/2020 0.0 498.7 532.2US private placement USD 200 million 4.48 % 4.53 % 9/22/2021 0.0 183.3 212.7Bond EUR 500 million 1.00 % 1.04 % 5/19/2022 1.5 495.8 505.5December 31, 2015 1.5 1,676.1 1,802.9

Type Amount InterestEffective interest Maturity

Treasurystock in millions

of EUR

Carrying amount in mil-

lions of EUR

Fair value in millions of

EURBond CHF 225 million 3.88 % 3.97 % 8/3/2015 29.4 157.6 166.6Bond EUR 500 million 3.75 % 3.86 % 5/25/2018 0.0 497.7 556.3Bond EUR 500 million 1.75 % 1.76 % 5/21/2020 0.0 498.4 533.0US private placement USD 200 million 4.48 % 4.53 % 9/22/2021 0.0 162.2 183.0December 31, 2014 29.4 1,315.9 1,438.9

TreasurystockofEUR1.5million(2014:EUR29.4million)thatwastreatedascorporaterepurchasewasoffsetagainstthebondsthatwereissuedwithanoriginalvalueofEUR1,677.6million(2014:EUR1,345.3million).

ThecapitalborrowedthoughtheUSprivateplacementofUSD200millioniscontingentoncertaincovenantsbeingmet.TheWürthGroupisrequiredtomeetcertaindebtserviceratiossuchastheratioofnetfinancialdebttoEBITDAandsenior liabilities to equity. They also include restrictions on the disposal of assets.

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Thematuritiesandconditionsofliabilitiesduetobanksareasfollows:

Currency Interest terms

Remaining fixedinterest

period Interest rate < 1 year 1–5 years > 5 yearsCarrying

amountEUR floating/fixed < 1 year 0.01% – 6.00 % 97.6 0.6 0.1 98.3USD floating/fixed < 1 year 0.01% – 5.57 % 0.3 0.0 0.0 0.3Other floating/fixed < 1 year 0.01% – 20.00 % 22.9 0.7 0.0 23.6EUR fixed 1–5 years 0.78 % – 7.00 % 0.0 39.0 0.3 39.3EUR fixed > 5 years 2.00 % – 6.00 % 0.0 0.0 5.9 5.9December 31, 2015 120.8 40.3 6.3 167.4

Currency Interest terms

Remaining fixedinterest

period Interest rate < 1 year 1–5 years > 5 yearsCarrying

amountEUR floating/fixed < 1 year 0.01% – 7.05 % 63.1 14.3 54.9 132.3USD floating/fixed < 1 year 0.01% – 5.57 % 0.4 0.0 0.0 0.4Other floating/fixed < 1 year 1.00 % – 27.50 % 21.8 0.7 0.0 22.5EUR fixed 1–5 years 0.40 % – 7.00 % 0.0 39.1 0.3 39.4Other fixed 1–5 years 4.00 % – 20.00 % 0.0 5.8 0.0 5.8EUR fixed > 5 years 0.40 % – 5.00 % 0.0 0.0 0.9 0.9Other fixed > 5 years 4.00 % – 5.00 % 0.0 0.0 0.1 0.1December 31, 2014 85.3 59.9 56.2 201.4

Thecarryingamountsofliabilitiestobanksreportedinthestatementoffinancialpositionapproximatefairvalue. Non-currentliabilitiesfromleasesaresubjecttocustomarymarketinterestrates.

Thetablebelowshowsthecontractuallyagreedremainingtermstomaturity.

Cashflow

in millions of EURCarrying amounts

December 31, 2015 < 1 year 1–5 years > 5 yearsFinancial liabilities

Bonds,liabilitiestobanks 1,843.5 161.5 1,165.6 705.5Liabilities from leases 10.8 5.2 4.3 2.1Trade payables 553.5 553.5 0.0 0.0

DerivativefinancialliabilitiesInflowsfromcurrencyderivatives – 242.5 13.1 0.0Outflowsfromcurrencyderivatives 5.0 249.2 13.4 0.0Outflowsfrominterestratederivatives 30.0 7.0 24.3 5.5

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[25] Obligations from post-employment benefits

ApensionplanisinplaceforemployeesoftheWürthGroupfortheperiodaftertheyretire.Thebenefitsvaryaccordingtolocallegal,taxandeconomicconditions.Theobligationsincludevestedfuturepensionbenefitsaswellascurrentpen-sionspaid.Thecompanypensionschemeincludesdefinedcontributionplansanddefinedbenefitplans.

Inthecaseofdefinedcontributionplans,therespectiveentitypayscontributionstostateorprivatepensioncompanieseitheronavoluntarybasisorbasedonlegalprovisions.Thecontributionsarerecognizedasapersonnelexpensewhenthey fall due. No further payment obligations arise for the Würth Group from the payment of contributions. Current con-tributions(withoutcontributionstothestatutorypensioninsurance)totaledEUR13.1million(2014:EUR11.5million).PaymentsofEUR170.7millionweremadetothestatutorypensioninsuranceinthefiscalyear(2014:EUR162.1million).

ThelargestdefinedbenefitplansareinGermany,Austria,Italy,theNetherlandsandSwitzerland.ThedefinedbenefitplansinGermany,AustriaandItalyconstitutedirectobligations,whereastheSwissandDutchplansareindirectbenefitobligations. The amount of the entitlements depends on the length of service, frequently on the salary development and, forindirectbenefitobligations,alsoontheemployeecontributionspaidin. TheWürthGroup’sbenefitobligationsinGermanyguaranteethebeneficiariesalife-longmonthlyoldagepension,pro-videdthatavestingperiodoftenyearsofservicecanbedemonstrated.Theamountofthebenefitisusuallydeterminedbyarrangedfixedamounts.Employeesreceivesuchvoluntarypensionsinadditiontothestatutorypensiononcetheyreachthestatutoryretirementage.Employeesarealsoofferedanotherdefinedbenefitplanintheformofadeferredcompensationarrangementunderwhichgrosscashcompensationisconvertedtoacompanypensionplanbasedonindividual contracts. This voluntary conversion of monthly compensation is generally limited to the higher of either 10 % of onetwelfthoftheyearlyincomeintheyearbeforecommencementoftheconversionor4%oftherespectivemaximummonthlycontributiontotheGermanpensionsystem(westernGermanstates).Intotal,obligationsinGermanyamounttoEUR 131.6 million (2014: EUR 141.4 million).

InAustria,aseverancepaymentisguaranteedbylaw,subjecttotheprovisionsoftheBMVG[“BetrieblicheMitarbeiter-versorgungsgesetz”:AustrianActGoverningCompanyPensions].Thisispaidoutwhentheemploymentrelationshipends.For employment relationships that began before the end of 2002, the employee has a right to such payment from the employer. The amount depends on the length of service and salary development. If the employment relationship is termi-nated by the employee, the right to a severance payment from the employer is forfeited. For employment relationships started as of the beginning of 2003, the employer pays 1.53 % of the gross monthly salary into a selected company pen-sionscheme,whichthenpaysoutanyseverancepaymententitlementwhentheemploymentends.Theentitlementisnowretained even if the employee terminates the employment relationship. For employment relationships that began before the endof2002,totalobligationswererecognizedintheamountofEUR25.0millioninAustria(2014:EUR25.7million).

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InItaly,employeesareentitledbylawtoaseverancepaymentwhentheemploymentrelationshipends(trattamentodifinerapporto,TFR).TheamountoftheTFRisdeterminedbythenumberofyearsofserviceandiscappedatonemonth’ssalary per year of service. Since 2007, the legislature provides for a capital option, i.e., the employees can choose whetherprovisionshouldcontinuetobemadefortheirfutureentitlementsinthecompanyorbepaidintoapensionfundinstead.ObligationsofEUR26.1millionwererecognizedinthestatementoffinancialpositionoftheWürthGroupinItaly(2014: EUR 23.7 million).

IntheWürthGroupSwitzerland,retirementbenefitsarehandledviaexternalinsurancecompanies.TheyaresubjecttoregulatorysupervisionandaregovernedbytheBVG[“BundesgesetzüberdieberuflicheAlters-,Hinterlassenen-undInvalidenvorsorge”:SwissFederalActonOccupationalRetirement,Survivors’andDisabilityPensionPlans].Thetopmanagement body of these insurance companies, the trust board, is composed of an equal number of employee and employerrepresentatives.Thevariousbenefitsaresetforthinregulations,withminimumbenefitsstipulatedbytheBVG.Thecontributionstotheinsurancecompanyaresettledbyemployersandemployees.Intheeventofadeficit,measurescanbeagreed,suchasadjustingthebenefitobligationbychangingconversionratesorincreasingcurrentcontributions.InthecaseofalmostallSwissentitiesintheWürthGroupSwitzerland,theinsurancecompanyisaseparatepensiontrust.Thebenefitscomprisenotonlyoldagepensions,butalsodisabilityandsurvivingdependents’pensionbenefits.Thetrust’sstatutesdefinethepensionscopeandbenefitamounts,minimumpaymentobligationsandtheinvestmentstrategy.Allinsurance-relatedrisksarebornebythetrust.ThetrustboardreviewstheinvestmentstrategyannuallybymeansofanALM (asset liability management) analysis as part of its responsibility for the investment of the assets. In total, obligations inSwitzerlandamountedtoEUR196.9million(2014:EUR163.7million).PlanassetscametoEUR150.3million(2014:EUR 133.0 million). The associated net liability amounts to EUR 46.6 million (2014: EUR 30.7 million).

IntheWürthGroupNetherlands,thecompanypensionplanisbasedonaconsensusbetweenthegovernmentandthepartiestocollectivebargainingagreements.TheBPF[“Wetverplichtedeelnemingineenbedrijfspensioenfonds”:DutchMandatoryParticipationinanIndustry-widePensionFundAct]andthePSW[“Pensioen-enSpaarfondsenwet”:DutchPen-sion and Savings Fund Act] provide for quasi-obligatory additional company insurance. The mandatory membership of an industry-widepensionfundrelatestothemajorityofemployeescoveredbyadditionalpensioninsurance.Theadditionalinsurancecomprisesoldagepensionandinmanycasesalsosurvivingdependents’benefits.ThePSWsetsforththelegis-lator’skeyframeworkconditionsforcompanypensionplans.Theseincludearequirementtosegregatefundsaccumulatedforpensionpurposesfromacompany’sotherassets(inanindustry-widepensionfund,acompanypensionfundormasteror individual insurance policies at an insurance company) and the obligation on the part of the employer to ensure that the premiumsarepaid.IntheNetherlands,theWürthGrouppayspremiumstoaninsurancecompany.ThiswasaqualifiedinsurancepolicyupuntilDecember31,2015.TheexistingpolicywasterminatedbytheinsurancecompanyasofDecem-

133

ber31,2015duetothesignificantincreaseinthepriceofguaranteedpensionsinrecentyearsduetothelowinterestratesandincreaseinlifeexpectancy.AsofJanuary1,2016,thepreviouspensionarrangementswithguaranteedpensionpaymentswereswitchedovertoaguaranteedcontributionstructure.Thismeansthatnoobligationsfrompost-employmentbenefitsnowhavetobereportedintheNetherlands.Inthepreviousyear,theseobligationscametoEUR53.6million.Theplan assets amounted to EUR 57.0 million in the previous year.

Theobligationsfrompost-employmentbenefitsweredeterminedbasedonthefollowingassumptions:

Discount rate Future salary increases Future pension increases% 2015 2014 2015 2014 2015 2014Germany 2.50 2.00 3.0 3.00 1.75 2.00Austria 2.25–2.65 2.25–2.50 2.00–3.00 2.00–3.00 – –Italy 2.02 3.00 3.00 3.00 1.50 1.50Switzerland 0.83 1.20 1.00 1.00 – –Netherlands 2.20 2.20 1.30 1.30 2.00 2.00Other countries 1.00–3.80 1.00–3.60 2.00–3.00 2.00–3.50 1.00–3.00 1.00–3.25

The2005GmortalitytablesfromDr.KlausHeubeckareappliedinGermany.Themethodfordeterminingthediscountrate is unchanged compared to the prior year.

Thebenefitobligationsarederivedasfollows:

in millions of EUR 2015 2014 2013 2012 2011Presentvalueoffundedbenefitobligations 270.5 293.5 238.6 242.5 203.6Fair value of plan assets – 204.7 – 242.3 – 205.9 – 200.0 – 173.9AdjustmentsonplanassetsinaccordancewithIAS19.64b 0.0 3.3 1.6 4.4 5.1Net carrying amount on funded benefit obligations 65.8 54.5 34.3 46.9 34.8

Present value of unfunded benefit obligations 182.9 190.3 151.8 147.5 116.0Net benefit liability recognized in the statement of financial position 248.7 244.8 186.1 194.4 150.8

ExperienceadjustmentsPresent value of the obligations – 1.9 0.7 10.2 – 3.6 0.8

Theaveragetermtomaturityoftheobligationsfrompost-employmentbenefitsis18years.

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Thenetbenefitexpensefromdefinedbenefitplansbreaksdownasfollows:

in millions of EUR 2015 2014Service cost

Current service cost 24.1 16.7Past service cost – 2.7 – 0.1Income from plan settlements 0.3 0.0

Net interest cost 4.7 5.7Total expense recognized in the income statement 26.4 22.3

Theservicecostisrecognizedunderpersonnelexpenses,whilethenetinterestcostisrecordedinthefinancialresult.

Theremeasurementofdefinedbenefitplansbreaksdownasfollows:

in millions of EUR 2015 2014Actuarialgains(–)andlosses(+)recognized

on changes in actuarial assumptions – 7.6 74.8on changes in demographic assumptions – 1.9 0.7

Return on plan assets (less interest income) 6.2 – 19.8Effectsoftheassetceiling(IAS19.64b) – 3.3 1.7Remeasurement of defined benefit plans – 6.6 57.4

Thepresentvalueofthedefinedbenefitobligationschangedasfollows:

in millions of EUR 2015 2014Definedbenefitobligationatthebeginningoftheyear 483.8 390.4Changes in the consolidated group 2.1 1.8Increase due to deferred compensation 0.8 0.8Service cost 21.7 16.6Interest cost 9.5 11.7Employee contributions 6.2 5.1Benefitspaid – 12.6 – 12.2Actuarialgains(–)andlosses(+)recognized – 9.5 75.5Transferofbenefits – 60.5 – 7.7Exchangedifferenceonforeignplans 11.9 1.8Defined benefit obligation at the end of the year 453.4 483.8

135

Futureadjustmentsinpensiondevelopmentsaretakenintoaccountinaccordancewithlegalprovisions(e.g.inGermanySec.16BetrAVG[“GesetzzurVerbesserungderbetrieblichenAltersversorge”:GermanCompanyPensionsAct]).

Thefairvalueoftheplanassetshasdevelopedasfollows:

in millions of EUR 2015 2014Fair value of plan assets at the beginning of the year 242.3 205.9Interest income 4.8 6.0Return on plan assets (less interest income) – 6.2 19.8Employer contributions 12.1 11.0Employee contributions 6.2 5.1Benefitspaid – 4.9 – 2.9Transfer of assets – 60.5 – 4.4Exchangedifferenceonforeignplans 10.9 1.8Fair value of plan assets at the end of the year 204.7 242.3

Theactualreturncameinat–0.53%(2014:11.8%).Theamountofemployer’scontributionstoexternalfundsisexpectedtobesimilarinthefollowingyear.

Breakdownoffairvalueofplanassetsbyassetcategory:

in millions of EUR 2015 2014 2013 2012 2011Fixed-income investment funds 67.9 116.4 79.6 82.1 68.7Share-based investment funds 43.2 45.7 39.5 31.2 22.4Real estate investment funds 35.8 30.4 32.1 25.9 20.7Other funds 2.5 20.8 26.9 28.2 29.4Fixed-interest securities 25.2 15.1 16.0 17.2 10.6Shares 13.2 1.7 1.9 2.0 2.5Real estate 3.5 2.4 2.6 2.9 3.1Other 13.4 9.8 7.3 10.5 16.5Total 204.7 242.3 205.9 200.0 173.9

Asarule,quotedpricesareavailableonanactivemarketfortheequityanddebtinstruments.Theratingsforfundsandfixed-interestsecuritiesareusuallynotbelowA.Theitem“Other”primarilyrelatestocashandcashequivalentsinvestedatbankswithanAratingorhigher.

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Withregardtosensitivities,thekeyactuarialassumptionsdeterminedfortheWürthGroupGermanyarethediscountrateandfortheWürthGroupSwitzerlandthediscountrateandtherateoffuturesalaryincreases.AttheWürthGroupGermany,a0.5%increase/decreaseinthediscountratewouldleadtoadecrease/increaseintheDBO(DefinedBenefitObligation)of–8.7%/+10.0%.

AttheWürthGroupSwitzerland,a0.25%increase/decreaseinthediscountratewouldleadtoadecrease/increaseintheDBOof–3.8%/+4.0%.A0.5%increase/decreaseintherateoffuturesalaryincreaseswouldleadtoanincrease/decreaseintheDBOof+1.5%/–0.9%.

[26] Provisions

in millions of EURJanuary 1,

2015Exchange difference

Additions due to

changes in the consoli-

dated group Utilization Reversal Addition

Unwindingofthe discount

and changes in the

discount rateDecember 31,

2015Credit notes 67.5 0.3 0.6 49.5 5.3 54.9 0.0 68.5Long-service bonuses 70.1 0.1 0.0 1.4 1.5 3.1 3.7 74.1Warranty obligations 24.6 0.0 0.3 6.0 0.9 5.9 0.1 24.0Litigationandlawyers’fees 21.2 0.1 0.0 4.6 1.6 3.8 0.2 19.1Phased retirement scheme 8.2 0.0 1.6 1.9 1.0 1.6 0.3 8.8Product liability 7.2 0.0 0.0 1.4 0.9 2.3 0.3 7.5Sundry 32.3 0.1 0.2 9.1 6.5 21.7 0.3 39.0Total 231.1 0.6 2.7 73.9 17.7 93.3 4.9 241.0

Thereof: current 143.6 147.7 non-current 87.5 93.3

in millions of EURJanuary 1,

2014Exchange difference

Additions due to

changes in the consoli-

dated group Utilization Reversal Addition

Unwindingofthe discount

and changes in the

discount rateDecember 31,

2014Credit notes 64.1 0.0 0.1 58.8 5.2 67.3 0.0 67.5Long-service bonuses 60.0 0.1 0.0 0.5 1.2 8.5 3.2 70.1Warranty obligations 27.2 0.0 0.0 24.9 0.6 22.8 0.1 24.6Litigationandlawyers’fees 24.3 0.0 0.0 2.5 5.1 4.2 0.3 21.2Phased retirement scheme 7.5 0.0 0.0 0.3 1.3 2.0 0.3 8.2Product liability 5.5 0.0 0.0 0.8 0.2 2.4 0.3 7.2Sundry 37.6 0.0 0.1 10.4 5.3 10.1 0.2 32.3Total 226.2 0.1 0.2 98.2 18.9 117.3 4.4 231.1

Thereof: current 146.9 143.6 non-current 79.3 87.5

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The provision for credit notes is primarily attributable to obligations relating to discounts, bonuses, etc. granted that are allocable to the period after the reporting date, but caused by sales prior to the reporting date. The provision for long- servicebonusescontainsbonusesawardedtoemployeeswhohavebeenwiththecompanyformanyyears.Theprovisionforwarrantyobligationsaccountsforrisksfromlegalorconstructiveobligationsfromtradewithfasteningandassemblymaterialsinvolvingtradecustomers,thebuildingindustryandindustrialcustomers,aswellasfromthemanufactureofscrewsandfittings.Otherprovisionsrelatetonumerousidentifiablespecificrisksanduncertainliabilitieswhichwereaccountedforattheamountatwhichtheyarelikelytobeincurred.

Thecashoutflowforprovisionsforlong-servicebonusesandtheGermanphasedretirementscheme(“Altersteilzeit”)ismainlyofamedium(twotofouryears)tolong-term(fiveto50years)nature.Inmostcasesotherprovisionsareexpectedtoleadtoacashoutflowinthenextfiscalyear.

[27] Other financial liabilities



withinoneyearLiabilities to related parties 7.9 6.7 10.6 9.4Derivative liabilities 14.5 14.5 16.6 16.6Liabilities from business combinations 102.0 3.3 0.0 0.0Sundryfinancialliabilities 345.8 340.0 293.3 288.4Total 470.2 364.5 320.5 314.4

Sundryfinancialliabilitiesessentiallyincludeliabilitiestoemployees,outstandingpurchaseinvoicesandcustomerswithcredit balances.

[28] Other liabilities



withinoneyearPrepaid expenses 13.4 13.4 14.3 14.3Other liabilities 361.6 357.4 329.8 324.8Total 375.0 370.8 344.1 339.1

Liabilities relating to social security amount to EUR 66.3 million (2014: EUR 69.8 million). In addition, sundry liabilities include liabilities from other taxes of EUR 102.0 million (2014: EUR 85.2 million).

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[29] Additional disclosures on financial instruments – carrying amounts, amounts recognized and fair values by measurement category

Amountrecognizedinthestatement offinancialposition

Fair value

Dec. 31, 2015

in millions of EUR

Assets

Measurement category under

IAS 39

Carrying amount

Dec. 31, 2015

Amortizedcost

Fair value (recognized

directly in equity)

Fair value through profitor

lossIAS 17

Financial assets AfS/HtM 48.2 48.2 32.8Receivablesfromfinancialservices LaR/n.a. 1,440.0 1,107.0 333.0 1,440.0Trade receivables LaR 1,427.2 1,427.2 1,427.2Otherfinancialassets

Receivables from related parties LaR 47.1 47.1 47.1Derivativefinancialassets FAHfT/LaR 14.7 – 14.1 28.8 14.7Sundryfinancialassets LaR 106.4 106.4 106.4

Securities AfS/FAHfT/FAFVtpl 137.4 66.3 71.1 137.4Cash and cash equivalents FAFVtpl/LaR 615.9 615.1 0.8 615.9Equity and liabilitiesLiabilitiesfromfinancialservices FLAC 1,174.8 1,174.8 1,174.8Trade payables FLAC 553.5 553.5 553.5Financial liabilities FLAC/n.a. 1,894.5 1,883.7 10.8 2,019.8Otherfinancialliabilities

Liabilities to related parties FLAC 7.9 7.9 7.9Derivative liabilities FLAC/FLHfT 14.5 – 20.5 35.0 14.5Liabilities from business combinations FLAC 102.0 102.0 102.0Sundryfinancialliabilities FLAC 345.8 345.8 345.8

Thereof combined by measurement category in accordance with IAS 39:1 Held-to-maturity investments (HtM) 32.8 32.8 32.82 Financial assets held for trading (FAHfT) 28.8 28.8 28.83 Financial assets (designated as) atfairvaluethroughprofitorloss (FAFVtpl) 71.9 71.9 71.94Available-for-salefinancialassets (AfS) 81.7 15.4 66.3 66.35 Loans and receivables (LaR) 3,288.7 3,288.7 3,288.76 Receivables from the leasing business (n. a.) 333.0 333.0 333.07 Financial liabilities held for trading (FLHfT) 35.0 35.0 35.08Financialliabilitiesatamortizedcost (FLAC) 4,047.2 4,047.2 4,172.59 Lease obligations (n. a.) 10.8 10.8 10.8

139

Amountrecognizedinthestatement offinancialposition

Fair value

Dec. 31, 2014

in millions of EUR

Assets

Measurement category under

IAS 39

Carrying amount

Dec. 31, 2014

Amortizedcost

Fair value (recognized

directly in equity)

Fair value through profitor

lossIAS 17

Financial assets AfS/HtM 53.5 53.5 32.4Receivablesfromfinancialservices LaR/n.a. 1,412.2 1,107.9 304.3 1,412.2Trade receivables LaR 1,266.7 1,266.7 1,266.7Otherfinancialassets

Receivables from related parties LaR 74.7 74.7 74.7Derivativefinancialassets FAHfT/LaR 15.0 – 24.6 39.6 15.0Sundryfinancialassets LaR 88.9 88.9 88.9

Securities AfS/FAHfT/FAFVtpl 131.4 56.1 75.3 131.4Cash and cash equivalents FAFVtpl/LaR 601.6 601.3 0.3 601.6Equity and liabilitiesLiabilitiesfromfinancialservices FLAC 1,129.2 1,129.2 1,129.2Trade payables FLAC 477.5 477.5 477.5Financial liabilities FLAC/n.a. 1,573.7 1,561.4 12.3 1,670.5Otherfinancialliabilities

Liabilities to related parties FLAC 10.6 10.6 10.6Derivative liabilities FLAC/FLHfT 16.6 – 10.8 27.4 16.6Sundryfinancialliabilities FLAC 293.3 293.3 293.3

Thereof combined by measurement category in accordance with IAS 39:1 Held-to-maturity investments (HtM) 32.4 32.4 32.42 Financial assets held for trading (FAHfT) 39.6 39.6 39.63 Financial assets (designated as) atfairvaluethroughprofitorloss (FAFVtpl) 75.6 75.6 75.64Available-for-salefinancialassets (AfS) 77.2 21.1 56.1 56.15 Loans and receivables (LaR) 3,114.9 3,114.9 3,114.96 Receivables from the leasing business (n. a.) 304.3 304.3 304.37 Financial liabilities held for trading (FLHfT) 27.4 27.4 27.48Financialliabilitiesatamortizedcost (FLAC) 3,461.2 3,461.2 3,558.09 Lease obligations (n. a.) 12.3 12.3 12.3

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The following tables show the measurement of the fair value of the Würth Group’s assets and liabilities by hierarchical level.

Assets and liabilities at fair value:

in millions of EURTotal

Dec. 31, 2015

Listed price on activemarkets

(level 1)

Material observable input

parameter (level 2)Derivative assets

Currency instruments 5.0 0.0 5.0Interest instruments 23.8 0.0 23.8

Securities 137.4 66.3 71.1Cash and cash equivalents 0.8 0.8 0.0Financial assets at fair value 167.0 67.1 99.9Derivative liabilities


Financial liabilities at fair value 35.0 0.0 35.0


Dec. 31, 2014

Listed price on activemarkets

(level 1)

Material observable input

parameter (level 2)Derivative assets


Securities 131.4 56.1 75.3Cash and cash equivalents 0.3 0.3 0.0Financial assets at fair value 171.3 56.4 114.9Derivative liabilities


Financial liabilities at fair value 27.4 0.0 27.4

141

Notesonthefairvaluesofthosefinancialassetsandliabilitiesthatwerenotstatedatfairvalueintheconsolidatedstate-mentoffinancialposition:


Dec. 31, 2015

Listed price on active

markets(level1)

Material observ-able input parame-

ter (level 2)Financial assets 32.8 0.0 32.8Receivablesfromfinancialservices 1,440.0 0.0 1,440.0Trade receivables 1,427.2 0.0 1,427.2Receivables from related parties 47.1 0.0 47.1Sundryfinancialassets 106.4 0.0 106.4Cash and cash equivalents 615.1 615.1 0.0Financial assets not stated at fair value 3,668.6 615.1 3,053.5Liabilitiesfromfinancialservices 1,174.8 0.0 1,174.8Trade payables 553.5 0.0 553.5Financial liabilities 2,019.8 0.0 2,019.8Liabilities to related parties 7.9 0.0 7.9Liabilities from business combinations 102.0 0.0 102.0Sundryfinancialliabilities 345.8 0.0 345.8Financial liabilities not stated at fair value 4,203.8 0.0 4,203.8


Dec. 31, 2014

Listed price on active

markets(level1)

Material observ-able input parame-

ter (level 2)Financial assets 32.4 0.0 32.4Receivablesfromfinancialservices 1,412.2 0.0 1,412.2Trade receivables 1,266.7 0.0 1,266.7Receivables from related parties 74.7 0.0 74.7Sundryfinancialassets 88.9 0.0 88.9Cash and cash equivalents 601.3 601.3 0.0Financial assets not stated at fair value 3,476.2 601.3 2,874.9Liabilitiesfromfinancialservices 1,129.2 0.0 1,129.2Trade payables 477.5 0.0 477.5Financial liabilities 1,670.5 0.0 1,670.5Liabilities to related parties 10.6 0.0 10.6Sundryfinancialliabilities 293.3 0.0 293.3Financial liabilities not stated at fair value 3,581.1 0.0 3,581.1

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I. Other notes

[1] Commitments and contingencies

in millions of EUR 2015 2014Guarantees,warrantiesandcollateralforthird-partyliabilities 28.7 33.1

Guarantees,warrantiesandcollateralaredueimmediatelyuponrequest.

[2] Other financial obligations

in millions of EUR 2015 2014Obligations from operating leasesduewithin12months 236.6 216.6due in 13 to 60 months 415.0 386.6due in more than 60 months 117.9 64.3

769.5 667.5

Purchase obligationsduewithin12months 425.1 386.7due in 13 to 60 months 0.0 0.3

425.1 387.0

Sundry financial obligationsduewithin12months 96.9 94.0due in 13 to 60 months 69.7 73.0due in more than 60 months 0.8 1.7

167.4 168.7Total 1,362.0 1,223.2

The operating leases mainly relate to rented buildings and leased vehicles. The interest rates stipulated in the lease agree-mentsarecustomarymarketrates.Therearenopurchaseoptionsuponexpiryoftheleaseeitherfortherentedbuildings or the leased vehicles.

ThesundryfinancialobligationscontainirrevocablelendingcommitmentsofInternationalesBankhausBodenseeAG,Friedrichshafen, Germany in the amount of EUR 139.7 million (2014: EUR 147.1 million).

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Thetablebelowshowsthepaymentsfromoperatingleasesrecognizedinprofitorloss:

in millions of EUR 2015 2014Real estate 142.5 123.7Machines,equipment,furnitureandfixtures 13.6 12.4Vehiclefleet 130.2 127.8Other 2.4 2.7Total 288.7 266.6

[3] Contingent liabilities

Asaninternationalgroupwithvariousareasofbusiness,theWürthGroupisexposedtomanylegalrisks.Thisisespe-ciallytrueofrisksforwarranties,taxlawandotherlegaldisputes.However,accordingtotheassessmentbytheCentralManagingBoard,nodecisionsareexpectedthatwouldhaveasignificantinfluenceonthenetassetsoftheGroup.Taxfieldauditsatgroupentitieshavenotbeencompletedyetandtherelatedauditfindingshavenotbeenreportedyet.

[4] Financial instruments

Financial risk managementThroughitsfinancialactivities,theWürthGroupissubjecttovariousrisksthatareassessed,managedandmonitoredbyasystematicriskmanagementsystem.

DetailsoftheGroup’smanagementofmarketrisks(exchangerates,interestratesandsecuritiesrisks),creditrisksandliquidityexposuresarepresentedbelow.

Exchange rate risksTheWürthGroupisexposedtocurrencyrisksfromfinancingandoperatingactivities.Byexchangeraterisks,theWürthGroupmeanstheexposureoftheassetsandincomedisclosedresultingfromexchangeratefluctuationsbetweenthetransaction currency and the functional currency in each case.

Asfarasoperationsareconcerned,theindividualgroupentitiesmainlycarryouttheiractivitiesintheirownfunctionalcurrency.ThecurrencyriskfortheWürthGroupfromcurrentoperatingactivitiesisthereforeclassifiedaslow.Exchangeraterisksarecounteredbyforwardexchangecontractsandcurrencyoptions.Derivativefinancialinstrumentsareusedtohedgefuturesalesandgoodspurchasesagainstexchangeraterisks.

Regardingthepresentationofmarketrisks,IFRS7requiressensitivityanalysesshowinghowprofitorlossandequitywouldbeaffectedbyhypotheticalchangesintherelevantriskvariable.

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Iftheeurohaddepreciated(appreciated)againsttheUSdollar,theSwissfrancandthepoundsterlingby10%asofDecember31,2015,thehypotheticaleffectonprofitorlosswouldhavebeenasfollows:

in millions of EURHypotheticaleffectonprofitorloss

2015Hypotheticaleffectonprofitorloss

2014Currency Depreciation Appreciation Depreciation AppreciationUS dollar – 0.4 0.4 3.9 – 3.9Swissfranc 16.9 – 16.9 – 8.5 8.5Pound sterling 0.1 – 0.1 0.0 0.0

Therewerenochangesaffectingothercomprehensiveincome.

Interest rate risksByinterestraterisk,theWürthGroupmeansthenegativeeffectsonthenetassetsandresultsofoperationsresultingfromchangesininterestrates.Oneofthemethodsusedtocounterthisriskistoensurethatalargepartofexternalfinancingisinfixed-interestratebonds.Inaddition,derivativesareusedforriskmanagementpurposes(e.g.interestrateswaps). Theinterestrateriskismainlylimitedtotheliabilitiestobankswithfloatinginterestrateslistedunder[24]“Financialliabili-ties”andtheitemspresentedunder[13]“Receivablesfromfinancialservices”andunder[23]“Liabilitiesfromfinancialservices”.

UnderIFRS7,interestraterisksarepresentedusingsensitivityanalyses.Thesepresenttheeffectsofchangesinmarketinterestratesoninterestpayments,interestincomeandexpenses,othercomponentsofprofitorlossand,ifapplicable,onequity.

Ifthemarketinterestlevelhadbeen100basepointshigher(lower)asofDecember31,2015,profitorlosswouldhavebeenEUR5.3millionlower(higher)(2014:EUR5.8million).Thehypotheticaleffectonprofitorlossismainlyattributabletooverdraftfacilitiesaswellasreceivablesandliabilitiesfromfinancialservices.Equitywouldchangeaccordingly.Therewerenochangesaffectingothercomprehensiveincome.

Securities risksTheWürthGroupisexposedtosecuritiesrisksbecauseofitsinvestments.Specifically,thereisariskoffinanciallossduetochangesinpricesof(publiclytraded)securities.Onewayofcounteringthisriskisthroughdiversificationoftheinvestmentportfolio.Whenselectingbonds,aminimumratingofBBB(Standard&Poor’s)isgenerallyrequired.Theratingdevelopmentismonitoredonadailybasis.Ifthebondsaredowngradedbytheratingagency,theyaresoldimmediately.Inaddition,derivativesareusedforriskmanagementpurposestohedgesecuritypricerisks.

145

Credit riskThecreditriskiscounteredbylimitingbusinessrelationshipstofirstclassbankswithaminimumratingofBBB(Standard&Poor’s).Defaultrisksfromreceivablesareminimizedbycontinuousmonitoringofthecreditworthinessofthecounterpartyandbylimitingtheaggregatedindividualrisksfromthecounterparty.StandardizedmasteragreementsoftheInternationalSwapsandDerivativesAssociation(ISDAmasteragreements),includingtheCreditSupportAnnex(CSA),areinplacewiththoseexternalcounterpartiesoftheWürthGroupwithwhomitentersintotransactionsaspartofitsfinancialriskmanagement.

Themaximumcreditriskisthecarryingamountofthefinancialassetsrecognizedinthestatementoffinancialposition.Thecreditriskfromoperatingactivitiesisaccountedforbyrecognizingaportfolio-basedspecificallowanceontradereceivables.

Liquidity risksTheWürthGroupneedsliquiditytomeetitsfinancialobligations.GroupentitiesareobligedbytheGroup‘sguidelinestodepositanyexcesscashnotneededtomeetcurrentobligationswithWürthFinanceInternationalB.V.,‘s-Hertogenbosch,Netherlands,orAdolfWürthGmbH&Co.KG,Künzelsau,Germany,tomakeitavailabletotheWürthGroup.ThehighinternationalcreditratingreceivedbytheWürthGroup(Standard&Poor’sissuedanAratingontheWürthGroup’snon-current liabilities) means that the Group can obtain favorable terms for procuring funds on international capital markets.Inordertobeinapositiontomeetitspaymentobligationsatanytime,eveninextraordinarycircumstances,theWürthGroupalsomaintainslinesofcreditwithvariousbankstocoverpotentialliquiditybottlenecks.

Capital managementTheprimaryobjectiveoftheWürthGroup’scapitalmanagementistoensurethatitmaintainsastrongcreditratingandhealthy equity ratio. The Group manages its capital structure in light of changes in economic conditions. In addition, thefinancialserviceproviderswithintheGroupcomplywiththeapplicableregulatorycapitalrequirements.Nochangesweremadetotheobjectives,policiesandprocessesasofDecember31,2015andDecember31,2014.Theequityratio,calculatedasequityinaccordancewithIFRSdividedbytotalassets,is44.3%(2014:45.2%).Thismeansthattheequityratio is higher than the industry average, and ensures the Würth Group an investment grade A rating at present. Regarding aUSprivateplacement,theWürthGroupisalsorequiredtocomplywithacertainratioofseniorliabilitiestoequity.

Fair value of financial instrumentsThefairvalueoffinancialinstrumentsthatareincludedintheportfolioofavailable-for-salefinancialassetsandfinancialassetsheldfortradingisestimatedbycomparingitwiththemarketpriceonthereportingdate.

Thefairvalueoffinancialinstrumentsdesignatedasatfairvaluethroughprofitorlossisdeterminedusingthevaluationtechniquespresentedunder[20]“Securities”.

ThelossresultingfromadjustingthefairvalueoffinancialassetsatfairvaluethroughprofitorlossamountedtoEUR0.9millioninthefiscalyear(2014:EUR0.1million)andwasrecordedinfullinprofitorlossfortheperiod.

146


Thefairvalueofforwardexchangecontractsismeasuredusingtheclosingratesontheforwardexchangemarkets.Inter-estrateswapsaremeasuredatfairvalueonthebasisofthepresentvalueofestimatedfuturecashflows.Thefairvalueofoptionsismeasuredusingoption-pricingmodels.TheWürthGrouphasapolicyofobtainingconfirmationofthefairvalueofalltheaboveinstrumentsbythebanksthatarrangedtherespectivecontractsfortheWürthGroup.

ThefinancialinstrumentsnotrecognizedatfairvaluewithintheWürthGroupprimarilycomprisecertaincashequivalents,trade receivables, other current assets, other non-current assets, trade payables, and other liabilities, overdraft facilities, non-current loans and held-to-maturity investments.

The carrying amount of cash equivalents and overdraft facilities approximates fair value due to the high liquidity of the financialinstruments.

Thehistoricalcostcarryingamountofreceivablesandpayablessubjecttonormaltradecredittermsalsoapproximatesfair value.

Thefairvalueofnon-currentliabilitiesisbasedonthemarketpricefortheseliabilitiesorsimilarfinancialinstrumentsoronthecurrentinterestratesforborrowingatsimilartermsandconditions.Theamountsreportedinthestatementoffinancialpositionapproximatefairvalueandarepresentedseparatelyinnote[29]“Additionaldisclosuresonfinancialinstruments”.

Derivative financial instrumentsAsofthereportingdate,thefairvalueofderivatefinancialinstrumentswasasfollows:

in millions of EUR Contract value or nominal

value Positive replacement

value Negative replacement value Type 2015 2014 2015 2014 2015 2014Currency instruments

Foreignexchangeforwardcontracts 771.2 930.0 4.9 2.0 5.0 4.0Currency options (OTC) 2.7 0.0 0.1 0.0 0.0 0.0

Total currency instruments 773.9 930.0 5.0 2.0 5.0 4.0Interest instruments

Interestrateswaps 787.5 850.7 20.2 36.7 24.5 22.6Cross-currencyswaps 201.3 34.9 3.6 0.9 5.5 0.8

Total interest instruments 988.8 885.6 23.8 37.6 30.0 23.4Reduction due to CSA 14.1 24.6 20.5 10.8Net replacement value 0.2 – 1.6

Aspartoffinancialriskmanagement,acreditsupportannex(CSA)wasenteredinto.Forthisreason,thepositiveandneg-ativereplacementvaluesoftheinterestinstrumentswereallpresentedasanetvalueinthestatementoffinancialposition,i.e.aftertakingintoaccountthecashsettlementundertheCSA.

147

[5] Leases

LesseeThenetcarryingamountofassetsleasedunderfinanceleasesbreaksdownasfollows:

in millions of EUR 2015 2014Real estate 7.4 7.4Machines,equipment,furnitureandfixtures 3.4 3.0Vehiclefleet 1.7 2.4Other 0.0 0.3Total 12.5 13.1

Thevastmajorityoffinanceleasesrelatetorealestate.Theseagreementsaregenerallydesignedtoincludeapurchaseoptionandarenewaloption.Furthermore,somecontainpriceescalationclausesbasedontheEuribor.Therearenosignif-icant restrictions imposed by lease agreements.

Minimumleaseinstallmentsovertheremainingtermsofthefinanceleaseagreementsandtheirpresentvalueareasfollows:

in millions of EUR 2015 2014duewithin12months 5.2 3.2due in 13 to 60 months 4.3 8.6due in more than 60 months 2.1 2.7

Minimumleasepaymentsfromfinanceleases less expected future interest payments 11.6 14.5

duewithin12months 0.1 0.6due in 13 to 60 months 0.4 1.1due in more than 60 months 0.3 0.3

Present value of minimum lease payments 10.8 12.5Thereof

duewithin12months 5.1 2.6due in 13 to 60 months 4.0 7.4due in more than 60 months 1.8 2.5

LessorTheconsolidatedgroupalsocontainssomeentitiesthatspecializeinleases.Theseentitiesalsohavefinanceandoperat-ingleaseswithexternalthirdparties,primarilyformachines,equipment,furnitureandfixtures,andvehicles.

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Reconciliationofthetotalgrossinvestmenttothepresentvalueoffinanceleases–lessor:

December 31duewithin 12 months

due in 13 to 60 months

due in more than 60 months

in millions of EUR 2015 2014 2015 2014 2015 2014 2015 2014Total lease installments (gross total investments in the lease) 771.1 660.1Lease installments already received 303.9 266.2Lease installments (future minimum lease payments) 467.2 393.9 147.1 128.9 298.3 249.5 21.8 15.5Thereof: lease payments already sold 276.9 217.2 82.3 68.9 177.5 137.5 17.1 10.8Unearnedfinanceincome 47.6 44.2 18.3 18.1 27.7 24.0 1.6 2.1Present value of the outstanding minimum lease payments 142.7 132.5 46.5 41.9 93.1 88.0 3.1 2.6

Thefinanceleasesaremainlyhire-purchasearrangementsorfullpayoutleaseagreementswithamaximumtermofover90%oftheleasedassets’estimatedusefullife.Thecontractscanonlybeterminatedforduecauseforwhichthecounter-party is responsible.

ValuationallowancesofEUR0.4million(2014:EUR0.6million)wererecognizedinthefiscalyearforuncollectableout-standing minimum lease payments.

Cashflowfromoperatingleases–lessor:

in millions of EUR 2015 2014duewithin12months 3.4 0.2due in 13 to 60 months 11.1 0.5due in more than 60 months 7.2 0.0Total 21.7 0.7

[6] Related parties

Basically,relatedpartiesaremembersoftheWürthfamilyandentitiescontrolledbythemaswellaskeymanagementpersonnel(membersoftheWürthGroup’sCentralManagingBoardandtheExecutiveBoard),membersoftheAdvisoryBoardoftheWürthGroup,theManagementBoardoftheWürthGroup’sFamilyTrusts,theSupervisoryBoardoftheWürthGroup’sFamilyTrustsandclosefamilymembersoftheaforementionedgroupsofpersons.Relatedpartiesalsoincludethefamilytrusts.Relatedpartytransactionswereallconductedatarm’slength.

PaymentsofEUR247.1million(2014:EUR207.1million)weremadetomembersoftheWürthfamilyandthefamilytrustsfor distributions and usufructuary rights. Of the payments made, an amount of EUR 164.5 million (2014: EUR 147.4 mil-lion)waspaidbackasacapitalcontribution.

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ThetransactionsandinterestincomeandexpenseslistedbelowwereeffectedbetweentheWürthGroupandtheWürthfamily,membersoftheCentralManagingBoard,theExecutiveBoardandtheAdvisoryBoard,aswellastheManage-mentBoardandtheSupervisoryBoardoftheWürthGroup’sFamilyTrusts.

in millions of EUR 2015 2014Purchased services 3.1 3.2Services rendered 0.3 0.2Interest cost 0.5 1.0Interest income 0.1 0.1Lease/rentalexpense 4.9 6.1Lease/rentalincome 0.2 0.2Remuneration of the Management Board and Supervisory Board oftheWürthGroup’sFamilyTrusts,andtheAdvisoryBoard 5.9 4.8

Thefollowingreceivablesandliabilitiesarosefromthesetransactions:

in millions of EUR 2015 2014Receivablesfromfinancialservices 16.9 8.7Loan receivable 17.4 20.5Liabilitiesfromfinancialservices 2.9 1.6Loan liabilities 7.9 10.6

Inaddition,closefamilymembersofkeymanagementpersonnelreceivedwageandsalarypaymentsofEUR2.1mil-lion(2014:EUR0.1million).Inaddition,thereareliabilitiesfromfinancialservicesamountingtoEUR0.1million(2014:EUR 0.2 million).

TheinterestincomeandexpenseslistedbelowweretransactedbetweentheWürthGroupandtheFamilyTrusts:

in millions of EUR 2015 2014Lease/rentalexpense 1.0 1.0Interest cost 2.9 2.5Interest income 0.6 0.6

These transactions gave rise to loan receivables of EUR 29.7 million (2014: EUR 54.2 million) due from this group of per-sons and loan liabilities of EUR 0.4 million (2014: EUR 0.1 million).

Thereceivablesduefromandliabilitiesduetorelatedpartiesforfinancialservicesaresubjecttomarketinterestrates.Allotherpurchasedservicesarealsorenderedatmarkettermsandconditions.

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[7] Compensation of key management personnel

in millions of EUR 2015 2014Short-termemployeebenefits 23.4 23.2Post-employmentbenefits 0.1 0.1Benefitsduetotheendoftheemploymentrelationship 0.3 0.2Total 23.8 23.5

IndividualmembersoftheCentralManagingBoardandtheExecutiveBoardhavearighttopensionbenefitswithatotalpresent value of EUR 16.2 million (2014: EUR 15.7 million). Former members and their surviving dependents are also entitled tobenefitpayments.ThepresentvalueoftheresultingbenefitobligationstotalsEUR17.3million(2014:EUR17.4million).

[8] Government grants

The Würth Group received government grants of EUR 1.6 million in the form of investment subsidies for infrastructure projects(2014:EUR0.9million).EUR0.6millionthereof(2014:EUR0.1million)wasdeductedfromtheassets’carryingamountsandEUR1.0million(2014:EUR0.8million)wasimmediatelyrecognizedinprofitorloss.

[9] Auditor’s fees

Thefollowingtableshows,onaggregate,thefeesincurredfortheservicesprovidedbytheauditorErnst&YoungGmbHWirtschaftsprüfungsgesellschaft,Stuttgart,Germanyinthefiscalyear2015.

in millions of EUR 2015Audit 2.0Assurance services 0.1Tax services 0.1Other fees 0.3Total 2.5

[10] Events after the reporting period

OnJanuary29,2016,theWürthGroupacquired100%ofthesharesandvotingrightsinErwinBücheleUnternehmens-gruppe,Esslingen,Germany.TheGroupdevelops,producesanddistributesrodcorechokesanditsactivitiesaretobecontinuedwithintheWürthElektronikeiSosGroup.ThepurchasepricewasEUR19.7million.

151

[11] Exemption from the duty of partnerships and stock corporations to prepare, audit and disclose financial statements

ThefollowingGermanGroupentitiesorganizedaspartnershipsmadeuseoftheexemptionclauseaccordingtoSec.264bHGBforthefiscalyear2015:

Entity Registered officeAbraham Diederichs GmbH & Co. oHG WuppertalAdolfMenschelVerbindungstechnikGmbH&Co.KG PlettenbergAdolf Würth GmbH & Co. KG KünzelsauArnold&ShinjoGmbH&Co.KG DörzbachArnoldUmformtechnikGmbH&Co.KG ForchtenbergBaier & Michels GmbH & Co. KG Ober-RamstadtCONMETALL GmbH & Co. KG CelleConpac GmbH & Co. KG CelleGlessdox GmbH & Co. KG UntermünkheimGrass GmbH & Co. KG ReinheimH. Sartorius Nachf. GmbH & Co. KG RatingenHetal-WerkeFranzHettichGmbH&Co.KG AlpirsbachHommelHercules-WerkzeughandelGmbH&Co.KG ViernheimIMS-VerbindungstechnikGmbH&Co.KG NeuensteinIVTInstallations-undVerbindungstechnikGmbH&Co.KG RohrMarbet Marion & Bettina Würth GmbH & Co. KG KünzelsauMKTMetall-Kunststoff-TechnikGmbH&CoKG WeilerbachPIRUSGrundstücksgesellschaftmbH&Co.oHG GöppingenSchössmetall GmbH & Co. KG FreilassingSiller&LaarSchrauben-Werkzeug-undBeschläge-HandelGmbH&Co.KG AugsburgSonderschrauben Güldner GmbH & Co. KG NiederstettenSynfiberAS&Co.BeschränkthaftendeKG WormsTeudeloffGmbH&Co.KG WaldenburgTOGE Dübel GmbH & Co. KG NurembergTUNAP Deutschland Vertriebs- GmbH & Co. Betriebs-KG WolfratshausenTUNAPIndustrieChemieGmbH&Co.ProduktionsKG WolfratshausenUniElektroFachgroßhandel&Co.GrundstücksverwaltungsgesellschaftOHG EschbornUNIELEKTROFachgroßhandelGmbH&Co.KG EschbornWagener & Simon WASI GmbH & Co. KG WuppertalWaldenburger Beteiligungen GmbH & Co. KG KünzelsauWerkzeugtechnikNiederstettenGmbH&Co.KG NiederstettenWLCWürth-LogistikGmbH&Co.KG KünzelsauWürth-ElektronikGmbH&CoKG NiedernhallWürthElektronikeiSosGmbH&Co.KG WaldenburgWürthElektrogroßhandelGmbH&Co.KG KünzelsauWürthElektronikICSGmbH&Co.KG Niedernhall

152


Entity Registered officeWürthGmbH&Co.KGGrundstücksgesellschaft KünzelsauWürth Immobilien-Leasing GmbH & Co.KG GöppingenWürth Industrie Service GmbH & Co. KG Bad MergentheimWürth IT International GmbH & Co. KG Bad MergentheimWürth Leasing GmbH & Co. KG GöppingenWürth Modyf GmbH & Co. KG KünzelsauWürth TeleServices GmbH & Co. KG KünzelsauWürth Versicherungsdienst GmbH & Co. KG KünzelsauYOUR OWN BRAND GmbH & Co. KG Regensburg

ThefollowingGermangroupentitiesorganizedascorporationsmadeuseoftheexemptionclauseaccordingtoSec.264(3)HGBforthefiscalyear2015:

Entity Registered officeDinol GmbH LügdeDringenberg GmbH Betriebseinrichtungen EllhofenErbschloeWerkzeugVertriebsgesellschaftmbH WuppertalFEGA&SchmittElektrogroßhandelGmbH AnsbachFFPMontageteileproduktionVertriebs-GmbH WaldenburgFlugplatzSchwäbischHallGmbH SchwäbischHallHAHN+KOLBWerkzeugeGmbH LudwigsburgHSRGmbHHochdruckSchlauch+RohrVerbindungen DuisburgINDUNORMHydraulikGmbH DuisburgKERONA GmbH ÖhringenLichtzentraleLichtgroßhandelGmbH AnsbachMeisterWerkzeugeGmbH WuppertalMeister-Werkzeuge,WerkzeugfabrikVertriebsgesellschaftmbH Wuppertal„METAFRANC“Möbel-u.BaubeschlägeVertriebsgesellschaftmbH WuppertalNormfest GmbH VelbertPanorama Hotel- und Service GmbH WaldenburgPronto-WerkzeugeGmbH WuppertalReca Norm GmbH KupferzellREISSERSchraubentechnikGmbH IngelfingenReinhold Würth Holding GmbH KünzelsauSchmittElektrogroßhandelGmbH FuldaSVH Handels GmbH DortmundSWGSchraubenwerkGaisbachGmbH WaldenburgWUCATOMarketplaceGmbH StuttgartWürthElektronikiBEGmbH ThyrnauWürth IT GmbH Bad MergentheimWOW ! Würth Online World GmbH Künzelsau

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J. Notes on the consolidated statement of cash flows

InaccordancewithIAS7,theconsolidatedstatementofcashflowsshowshowtheWürthGroup’scashhaschangedoverthefiscalyearasaresultofcashreceivedandpaid.Itisclassifiedbycashflowsfromoperating,investingorfinancingactivities.

Thecashflowfromoperatingactivitiesisderivedindirectlyfromtheearningsbeforetaxes.Specifically,thefigureforearn-ingsbeforetaxesisadjustedforincometaxpayments,financecostsandfinancerevenue,interestincomefromoperat-ingactivities,changesinobligationsfrompost-employmentbenefits,non-cashamortization,depreciation,impairmentandreversalsofimpairmentaswellaslossesandgainsonthedisposalofnon-currentassetsandothernon-cashexpensesandincome.Theinsurancesettlementresultingfromthefiredamagewasremovedfromthecashflowfromoperatingactiv-itiesandreportedundercashflowfrominvestingactivities.

Theeffectsofacquisitionsandotherchangesintheconsolidatedgrouphavebeeneliminated.Whenpurchasedsubsidiar-iesareincludedforthefirsttime,onlytheactualcashflowsareshownintheconsolidatedstatementofcashflows.Cashandcashequivalentsintheconsolidatedstatementofcashflowsconsistofcashonhandandbankbalancesaswellashighly liquid short-term investments and other cash equivalents.

Theeffectsofacquisitionsandotherchangesintheconsolidatedgroupontheconsolidatedstatementofcashflowshavebeenconsideredseparately.Wereferto“C.Consolidatedgroup”.

154


K. List of shareholdings

Entity Registered office

Würth Group share

in %

Albania

Würth Albania Ltd. Tirana 100

Argentina

Wumet Argentina S.A. Canuelas 100

Würth Argentina S.A. Canuelas 100

Armenia

Würth LLC Yerevan 100

Australia

Würth Australia Pty Ltd Dandenong South 100

Austria

Würth Handelsgesellschaft m.b.H. Böheimkirchen 100

Azerbaijan

WurthAzerbaijanLLC Baku 100

Belarus

FLLC“WurthBel” Minsk 100

Belgium

Würth België N.V. Turnhout 100

Bolivia

Wurth Bolivia S.r.l. SantaCruzdelaSierra 100

Bosnia and Herzegovina

WURTH BH d.o.o. Sarajevo 100

Brazil

Wurth do Brasil Peças de Fixação Ltda. Cotia 100

Bulgaria

Würth Bulgarien EOOD Sofia 100

Cambodia

Wuerth (Cambodia) Ltd. Phnom Penh 100

Canada

McFadden‘sHardwood&HardwareInc. Oakville 100

Würth Canada Ltd., Ltée Guelph 100

Chile

Würth Chile Ltda. Santiago de Chile 100

China

Wuerth(Shenyang)Hardware&ToolsCo.,Ltd. Shenyang 100

Wuerth(Tianjin)InternationalTradeCo.,Ltd. Tianjin 100

Würth(Chongqing)Hardware&ToolsCo.,Ltd. Chongqing 100


Würth Group share

in %

China

Würth(Guangzhou)International

Trading Co., Ltd. Guangzhou 100

Wurth Hong Kong Co., Ltd. Hong Kong 100

Colombia

Würth Colombia SA Bogotá 100

Costa Rica

Würth Costa Rica, S.A. La Uruca, San José 100

Croatia

Würth-Hrvatskad.o.o. Zagreb 100

Czech Republic

Würth, spol. s r.o. Mladá Boleslav 100

Denmark

WürthDanmarkA/S Kolding 100

Dominican Republic

Würth Dominicana S.A. Santo Domingo 100

Ecuador

WURTH ECUADOR S.A. Quito 100

Estonia

AktsiaseltsWürth Tallinn 100

Finland

Würth Oy Riihimäki 100

France

Würth France SA Erstein 95

Würth Modyf France S.A.R.L. Erstein 100

Georgia

Würth Georgia Ltd. Tiflis 100

Germany

Würth Modyf GmbH & Co. KG Künzelsau 100

Greece

Wurth Hellas S.A. Kryoneri,Attiki 100

Hungary

WürthSzereléstechnikaKFT Budaörs 100

Iceland

Würth á Íslandi ehf. Garðabær 100

WÜRTH LINE CRAFT

155


Würth Group share

in %

India

Wuerth India Pvt. Ltd. Mumbai 100

Indonesia

Wuerth Indonesia P.T. Jakarta 100

Ireland

Würth (Ireland) Limited Limerick 100

Israel

Würth Israel Ltd. Caesarea 100

Italy

Modyf S.r.l. Tramin 100

Würth S.r.l. Neumarkt 100

Japan

Würth Japan Co., Ltd. Yokohama 100

Jordan

Wurth - Jordan Co. Ltd. Amman 100

Kazakhstan

WuerthKazakhstanLtd. Almaty 100

Kenya

Wuerth Kenya Ltd. Nairobi 100

Kosovo

Würth-KosovaSh.p.k. Gračanica 100

Kyrgyzstan

WürthForeignSwissCompanyLtd. Bishkek 100

Latvia

SIA Wurth Riga 100

Lebanon

Wurth Lebanon SAL Beirut 100

Lithuania

Wurth Lietuva Vilnius 100

Macedonia

WurthMakedonijaDOOEL Skopje 100

Malaysia

Wuerth (Malaysia) Sdn. Bhd. Johor Bahru 100

Malta

Würth Limited Zebbug 99

Würth Mediterranean Limited Zebbug 100


Würth Group share

in %

Martinique

Würth Caraïbes SARL Ducos 100

Mexico

Würth México S.A. de C.V. Morelos 100

Moldova

Wurth S.R.L. Chisinau 100

Mongolia

Wuerth Mongolia LLC Ulan Bator 100

Montenegro

Wurth d.o.o. Podgorica Podgorica 100

Namibia

Wurth Namibia Windhoek 100

Netherlands

Würth Nederland B.V. ’s-Hertogenbosch 100

New Zealand

WurthNewZealandLtd. Auckland 100

Norway

Würth Norge AS Hagan 100

Panama

Würth Centroamérica S.A. Panama City 100

Peru

Würth Perú S.A.C. Lima 100

Philippines

Wuerth Philippines, Inc. Laguna 100

Poland

WürthPolskaSp.zo.o. Warsaw 100

Portugal

Würth (Portugal) Técnica de Montagem Lda. Sintra 100

Würth Modyf Lda. Sintra 100

Romania

Würth Romania S.R.L Otopeni 100

Russia

“WürthEurasien”Aktiengesellschaft Yekaterinburg 100

Wuerth North-West JSC St. Petersburg 100

Würth Russia Moscow 100

WÜRTH LINE CRAFT

156



Würth Group share

in %

Serbia

Wurth d.o.o. Belgrade 100

Slovakia

Hommel Hercules France, s.r.o. Bratislava 100

Würth spol. s r.o. Bratislava 100

Slovenia

Würth d.o.o. Trzin 100

South Africa

Wuerth South Africa (Pty.) Ltd. Gauteng 100

South Korea

Wurth Korea Co., Ltd. Hanam 100

Spain

WÜRTH CANARIAS, S.L. Las Palmas 100

Würth España, S.A. Palau-solità i Plegamans 100

Würth Modyf S.A. Palau-solità i Plegamans 100

Sri Lanka

WurthLanka(Private)Limited Nugegoda 100

Sweden

WürthSvenskaAB Örebro 100

Switzerland

Würth AG Arlesheim 100

Taiwan

WürthTaiwanCo.Ltd. Taipeh 100


Würth Group share

in %

Thailand

Wuerth (Thailand) Company, Limited Bangkok 100

Turkey

Würth Sanayi Ürünleri Tic. Ltd. Sti. Mimarsinan 100

Ukraine

WürthUkraineLtd. Vyshgorod 100

United Arab Emirates

Würth Gulf FZE Dubai 100

United Kingdom

Wurth (Northern Ireland) Ltd. Belfast 100

Würth U.K. Ltd. Erith 100

Uruguay

Wurth del Uruguay S.A. Barros Blancos 100

USA

Oliver H. Van Horn Co., LLC NewOrleans,Louisiana 100

Wurth Action Bolt & Tool Co. Riviera Beach, Florida 100

Wurth Baer Supply Co. Vernon Hills, Illinois 100

Wurth Louis and Company Brea, California 100

Wurth USA Inc. Ramsey,NewJersey 100

Wurth Wood Group Inc. Charlotte, North Carolina 100

Vietnam

Wurth Vietnam Company Limited Ho-Chi-Minh City 100

WÜRTH LINE CRAFT

157


WürthGroupshare

in %

Australia

Thomas Warburton Pty. Ltd. Dandenong South 100

Belgium

Würth Industry Belgium N.V. Grâce-Hollogne 100

Würth Industry Belux S.A. Grâce-Hollogne 100

Brazil

SW Industry Peças de Fixação Ltda. São Bernardo do Campo 100

Canada

Wurth Industry of Canada Ltd. Indianapolis 100

China

Arvid Nilsson Logistics & Trade (Shanghai) Co., Ltd. Shanghai 100

WASITianjinFastenerCo.,Ltd. Tianjin 100

Wuerth (China) Co., Ltd. Shanghai 100

Wuerth Baier & Michels (Shanghai)

Automotive Fastener Co., Ltd. Shanghai 100

Denmark

WürthIndustriDanmarkA/S Kolding 100

France

Würth Industrie France S.A.S. Erstein 100

Germany

Baier & Michels GmbH & Co. KG Ober-Ramstadt 100

Würth Industrie Service GmbH & Co. KG Bad Mergentheim 100

India

Wuerth Industrial Services India Pvt. Ltd. Pune 100

Italy

Baier & Michels S.r.l. Padua 100

Malaysia

Wuerth Industrial Services Malaysia Sdn. Bhd. Subang Jaya 100

Mexico

Wuerth Baier & Michels México S.A.de C.V. Querétaro 100

Würth McAllen Bolt de Mexico S de RL de CV Reynosa 100


WürthGroupshare

in %

Mexico

Würth McAllen Maquila Services S de RL de CV Reynosa 100

Würth Service Supply de Mexico Indianapolis 100

New Zealand

EDL Fasteners Ltd. Manukau 100

Norway

WürthIndustriNorgeA/S Dokka 100

Romania

S.C. Wurth Industrie S.r.l. Otopeni 100

South Africa

Action Bolt (Pty.) Ltd. Durban 100

South Korea

Korea Fasteners Ltd. Gyeonggi-Do 100

Spain

Würth Industria España, S.A. Barcelona 100

Sweden

Würth Industri Sverige AB Askim 100

Turkey

WürthBaier&MichelsOtomotivTürkiyeLtd.Şti. Bursa 100

Würth Industrie Service Endüstriyel

HizmetlerPazarlamaLimitedSirketi Silivri 100

USA

Baier & Michels USA Inc. Greer, South Carolina 100

Marine Fasteners Inc. Sanford, Florida 100

Northern Safety Company, Inc. Frankfort,NewYork 100

Würth Adams Nut & Bolt Company BrooklynPark,Minnesota 100

Wurth Des Moines Bolt Inc. DesMoines,Iowa 100

Wurth RevCar Fasteners, Inc. Roanoke,Virginia 100

WurthSniderBoltandScrew,Inc. Louisville,Kentucky 100

Wurth Timberline Fasteners Inc. Commerce City, Colorado 100

Wurth/ServiceSupplyInc. Indianapolis, Indiana 100

WÜRTH LINE INDUSTRY

158



Würth Group share

in %

Belgium

CONMETALL N.V. Mechelen 100

Duvimex Belgium BvbA Edegem 100

China

DIY Products Asia Ltd. Hong Kong 100

Meister Tools Trading (Shanghai) Co., Ltd. Shanghai 100

Czech Republic

CONMETALL spol. s r.o. Opava 100

Finland

AresOyNikotips Espoo 100

France

Meister France S.A.S. Strasbourg 100

SWG France SARL Forbach 100

Germany

Arnold&ShinjoGmbH&Co.KG Dörzbach 100

CONMETALL GmbH & Co. KG Celle 100

Conpac GmbH & Co. KG Celle 100

Glessdox GmbH & Co. KG Untermünkheim 100


Würth Group share

in %

Germany

IMS-VerbindungstechnikGmbH&Co.KG Neuenstein 100

IVTInstallations-undVerbindungstechnik

GmbH & Co. KG Rohr 100

KERONA GmbH Öhringen 100

MeisterWerkzeugeGmbH Wuppertal 100

Schössmetall GmbH & Co. KG Freilassing 100

TeudeloffGmbH&Co.KG Waldenburg 100

Hungary

REISSER Csavar Kft Szár 100

VanRoijFastenersHungariaKft. Dunaharaszti 100

Italy

Masidef S.r.l. Caronno Pertusella 100

UnifixSWGS.r.l. Terlano 100

Netherlands

VanRoijFastenersEuropeB.V. Deurne 100

Norway

Arvid Nilsson Norge AS Dokka 100

TRADE


WürthGroupshare in %

Austria

EichmannElektrofachgroßhandelGmbH Linz 100

Czech Republic

Elfetex spol. s r.o. Pilsen 100

Estonia

Talger-ElektrotehnikaOsaühing Tallinn 100

Germany

FEGA&SchmittElektrogroßhandelGmbH Ansbach 100

LichtzentraleLichtgroßhandelGmbH Ansbach 100

UNIELEKTROFachgroßhandelGmbH&Co.KG Eschborn 100



Germany

Walter Kluxen GmbH Hamburg 100

Italy

MEF S.r.l. Florence 65

Latvia

SIABaltjasElektroSabiedriba Riga 100

Lithuania

UAB ELEKTROBALT Vilnius 100

Poland

FegaPolandSp.zo.o. Wrocław 100

ELECTRICAL WHOLESALE

159


Würth Group share

in %

Norway

SynfiberAS Oslo 100

Poland

REISSER-POLSp.zo.o. Poznan 100

Romania

Meister Romania Srl Otopeni 100

Reisser Tehnic s.r.l. ClujNapoca 100

Russia

IVT Ural, O.O.O. BolshojIstok 100

TRADE


Würth Group share

in %

Spain

Reisser Tornillería SLU Barcelona 100

RUC Holding Conmetall S.A. Barcelona 100

SWGSchraubenwerkGaisbachEspana,S.L.U. Barcelona 100

Sweden

Arvid Nilsson Sverige AB Kungälv 100

Switzerland

Reinhold Handels AG Chur 100


Würth Group share

in %

Australia

GrassAustralia/NewZealandPtyLtd. Melbourne 100

Austria

Grass GmbH Höchst 100

Schmid Schrauben Hainfeld GmbH Hainfeld 100

Canada

Grass Canada Inc. Toronto 100

China

Arnold Fasteners (Shenyang) Co., Ltd. Shenyang 100

Grass (Shanghai) International Trading Co., Ltd. Shanghai 100

Czech Republic

GRASS CZECH s.r.o. CeskyKrumlov 100

Denmark

DokkaFastenersA/S Kolding 100

France

Arnold Technique France Anneyron 100


Würth Group share

in %

Germany

AdolfMenschelVerbindungstechnikGmbH&

Co. KG Plettenberg 100

ArnoldUmformtechnikGmbH&Co.KG Forchtenberg 100

BBStanz-undUmformtechnikGmbH Berga 100

Chemofast Anchoring GmbH Willich-Münchheide 100

Dringenberg GmbH Betriebseinrichtungen Obersulm-Sülzbach 100

FELO-WerkzeugfabrikHolland-LetzGmbH Neustadt 100

Grass GmbH & Co. KG Reinheim 100

Grass Vertriebs GmbH Deutschland Ofterdingen 100

Hetalco GmbH Alpirsbach 100

Hetal-WerkeFranzHettichGmbH&Co.KG Alpirsbach 100

MKTMetall-Kunststoff-TechnikGmbH&CoKG Weilerbach 100

REISSERSchraubentechnikGmbH(1) Ingelfingen-Criesbach 100

SWGSchraubenwerkGaisbachGmbH(1) Waldenburg 100

TOGE Dübel GmbH & Co. KG Nuremberg 100

WerkzeugtechnikNiederstettenGmbH&Co.KG Niederstetten 100

PRODUCTION

On (1): These entities also operate in the Trade segment.

160



Würth Group share

in %

Austria

WürthElektronikÖsterreichGmbH Schwechat 100

Bulgaria

WürthElektronikiBEBGEOOD Belozem 100

China

StelvioKontekLimited Hong Kong 100

WuerthElectronicTianjinCo.,Ltd. Tianjin 100

Wurth Electronics (Chongqing) Co., Ltd. Chongqing 100

Wurth Electronics (HK) Limited Hong Kong 100

Wurth Electronics (Shenyang) Co., Ltd. Shenyang 100

WurthElectronics(Shenzhen)Co.,Ltd Shenzhen 100

Czech Republic

WürthElektronikeiSosCzechs.r.o. Brünn 100

WürthElektronikIBECZs.r.o. Budweis 100

Finland

WürthElektronikOy Nurmijärvi 100


Würth Group share

in %

France

WürthElektronikFranceSAS Jonage 100

Germany

PARAVAN GmbH Pfronstetten-Aichelau 51

Würth-ElektronikGmbH&CoKG Niedernhall 94

WürthElektronikeiSosGmbH&Co.KG Waldenburg 100

WürthElektronikiBEGmbH Thyrnau 100

WürthElektronikICSGmbH&Co.KG Niedernhall 100

Hungary

SIMEElektronikaiGyártóésForgalmazóKft. Tab 75

India

WuerthElektronikCBTIndiaPrivateLimited Mysore 100

WuerthElektronikIndiaPvtLtd Bangalore 100

Wurth Electronics Services India Private Limited Bangalore 100

Italy

WuerthElektronikStelvioKontekS.p.A. Oggiono 100

ELECTRONICS

PRODUCTION


Würth Group share

in %

Hungary

FeloSzerszámgyárKft. Eger 100

Italy

Grass Italia SRL Pordenone 100

Norway

DokkaFastenersAS Dokka 100

Poland

DringenbergPolskaSp.zo.o. Zagan 100

South Africa

Grass ZA (Pty.) Ltd. Montague Gardens 100

Spain

Grass Iberia, S.A. Elgeta 100

Sweden

GrassNordiskaAB Jönköping 100


Würth Group share

in %

Switzerland

InovaChem Engineering AG Wetzikon 100

KMTKunststoff-undMetallteileAG Hinwil 100

Turkey

GrassTRMobilyaAksesuarlariTicaret

LimitedSirketi Istanbul 100

United Kingdom

Grass Movement Systems Ltd Bromsgrove 100

Tooling International Ltd. Solihull 100

USA

Arnold Fastening Systems, Inc. Auburn Hills, Michigan 100

Cardinal Fastener Inc. Bedford Heights, Ohio 100

DokkaFastenersInc. Auburn Hills, Michigan 100

Grass America, Inc. Kernersville, North Carolina 100

MKT Fastening L.L.C. Lonoke,Arkansas 100

161

ELECTRONICS


Würth Group share

in %

Italy

WürthElektronikItalias.r.l. Cormano 100

Mexico

Wemsa S.A. de C.V. Irapuato 100

WürthElektronikMexicoS.A.deC.V. Irapuato 100

Netherlands

WürthElektronikNederlandB.V. ’s-Hertogenbosch 100

Poland

WürthElektronikPolskasp.zo.O Wrocław 100

Romania

sc STM Elettromeccanica S.r.l. Blaj 100

Singapore

Wurth Electronics Singapore Pte. Ltd. Singapore 100

Spain

WürthElektronikEspaña,S.L. Barcelona 100


Würth Group share

in %

Sweden

WürthElektronikSwedenAB Enköping 100

Switzerland

WürthElektronik(Schweiz)AG Zurich 100

Taiwan

Wurth Electronics Co., Ltd. Taipeh 100

WürthElektronikeiSosGmbH&CoKG

TaiwanBranch Taipeh 100

Turkey

WürthElektronikIthalatIhracatveTicaretLtd.Sti. Ümraniye 100

United Kingdom

Würth Electronics UK Ltd. Manchester 100

USA

Wurth Electronics ICS, Inc. Dayton, Ohio 100

Wurth Electronics Midcom Inc. Watertown,SouthDakota 100



Austria

Kellner&KunzAG Vienna 100

Belgium

Reca Belux Ternat 100

Bosnia and Herzegovina

RECAd.o.o.,Sarajevo Sarajevo 100

Bulgaria

Reca Bulgaria EOOD Sofia 100

China

reca (Shanghai) Intern. Trading Co., Ltd. Shanghai 100

Croatia

reca d.o.o. Varazdin 100



Czech Republic

Normfest s.r.o. Prague 90

reca spol. s r.o. Brünn 100

France

Reca Union France Mundolsheim 75

Germany

Normfest GmbH Velbert 100

Reca Norm GmbH Kupferzell 100

Siller&LaarSchrauben-Werkzeug-

undBeschläge-HandelGmbH&Co.KG Augsburg 100

Hungary

Reca KFT Budapest 100

RECA GROUP

162




Austria

Hommel&SeitzGmbH Vienna 100

MetzlerGmbH&Co.KG Rankweil 100

Bulgaria

Hahn i Kolb Instrumenti EOOD Sofia 100

China

HAHN+KOLB(Tianjin)InternationalTradeCo.,Ltd. Tianjin 100

HAHN+KOLB(Chongqing)ToolsCo.,Ltd. Chongqing 100

HAHN+KOLB(Guangzhou)ToolsCo.,Ltd. Guangzhou 100

Czech Republic

HHW-HommelHerculesWerkzeughandelCZ/SKs.r.o. Prague 100

Germany

HAHN+KOLBWerkzeugeGmbH Ludwigsburg 100

HommelHercules-WerkzeughandelGmbH&Co.KG Viernheim 100

SARTORIUSWerkzeugeGmbH&Co.KG Ratingen 100

SVH Handels-GmbH Dortmund 100

Hungary

HAHN+KOLBHungariaKft. Budapest 100



India

HAHN+KOLBToolsPvt.Ltd. Pune 100

Mexico

HAHN+KOLBMexicoS.deR.L.deC.V. Puebla 100

Poland

HAHN+KOLBPOLSKASp.zo.o. Poznan 100

HHWHommelHerculesPLSp.zo.o. Katowice 100

Romania

HAHN+KOLBROMANIASRL Otopeni 100

Russia

OOOHahn+Kolb Moscow 100

Serbia

Hahn+Kolbd.o.o.Beograd Belgrade 100

Turkey

HAHN KOLB Endüstri Ürünleri Tic. Ltd. Sti Istanbul 100

United Kingdom

Monks&CraneIndustrialGroupLimited Wednesbury 100

TOOLS

RECA GROUP



Italy

FIME S.r.l. Belfiore 100

Reca Italia S.r.l. Gazzolod‘Arcole 100

SCAR S.r.l. Bussolengo 96

Netherlands

A.J.Steenkist-RooijmansB.V. Eindhoven 100

Poland

NormfestPolskaSp.zo.o. Poznan 100

recaPolskaSp.zo.o. Cracow 100

Romania

Reca Bucuresti S.R.L. Bucharest 100

Serbia

reca d.o.o. Beograd Belgrade 100



Slovakia

recaSlovenskos.r.o. Bratislava 100

Slovenia

Reca D.O.O. Pesnica pri Mariboru 100

Spain

reca Hispania S.A.U. Aldaya 100

Switzerland

Airproduct AG Oberwil-Lieli 100

Reca AG Samstagern 100

Turkey

RecaVidaAletveMakineParc.Tic.Ltd.Sti. Izmir 100

United Kingdom

reca-ukltd WestBromwich 100

163



Austria

TUNAP Cosmetics GmbH Kematen in Tyrol 51

Tunap Cosmetics Liegenschaften GmbH Kematen in Tyrol 51

TUNAPchemisch-technischeProdukte

Produktions-undHandelsgesellschaftm.b.H. Vienna 67

Belgium

Tunap Benelux nv Lokeren 100

Brazil

AP Winner Indústria e Comércio de Produtos

Químicos Ltda. Ponta Grossa 100

TUNAP do Brasil Comércio de Produtos Químicos Ltda. São Paulo 67

China

APWinner(Changzhou)Chemical

Technology Co., Ltd. Changzhou 100

Tunap (Shanghai) International Trading Co., Ltd. Shanghai 67

France

Tunap France SAS Dachstein 67

Germany

Dinol GmbH Lügde 100

Kisling (Deutschland) GmbH Bad Mergentheim 100

TUNAP Deutschland Vertriebs-GmbH

& Co. Betriebs-KG Wolfratshausen 51

TUNAP Industrie Chemie GmbH & Co.

ProduktionsKG Wolfratshausen 100

TUNAP Sports GmbH Munich 100

YOUR OWN BRAND GmbH & Co. KG Regensburg 100

Greece

TUNAP Hellas EPE Thessaloniki 67



Indonesia

PT. TUNAP INDONESIA Jakarta 67

Italy

Tunap Italia S.r.l. Terlano 67

YourOwnBrandS.R.L Milan 100

Netherlands

DiffuthermB.V. Hapert 100

Norway

Tunap Norge AS Hagan 67

Poland

TUNAPPolskaSp.Zo.o. Warsaw 67

Russia

TUNAP Russia OOO Moscow 67

Singapore

TUNAPAsia-PacificPte.Ltd. Singapore 67

Spain

Tunap Productos Quimicos S.A. Barcelona 67

Sweden

Tunap Sverige AB Sollentuna 67

Switzerland

Kisling AG Wetzikon 100

TUNAP AG Märstetten 51

Turkey

TunapKimyasalÜrünlerPazarlamaLtd.Sti. Istanbul 67

United Kingdom

Tunap (UK) Limited Tonbridge 67

YOUR OWN BRAND UK Ltd. North Somerset 100

USA

Dinol U.S. Inc. LewisCenter,Ohio 100

CHEMICALS

164




Australia

James Glen Pty Ltd Lidcombe 100

Austria

WASI-Rostfrei Schraubenhandelsges. mbH Vienna 100

Belgium

FASTINOX N.V. Turnhout 100

HSRBelgiumS.A./N.V. Turnhout 100

Bulgaria

Wasi Bulgarien EOOD Sofia 100

China

WASI (SHANGHAI) FASTENER TRADING CO., LTD. Shanghai 100

Croatia

WASI d.o.o. Zagreb 100

Denmark

WASIInoxDanmarkApS Kolding 100

Estonia

Ferrometal Baltic OÜ Tallinn 100

Finland

Ferrometal Oy Nurmijärvi 100

France

INTER-INOX Sarl Meyzieu 100

Germany

HSRGmbHHochdruckSchlauch+Rohr

Verbindungen Neukirchen-Vluyn 100



Germany

INDUNORMHydraulikGmbH Neukirchen-Vluyn 100

Sonderschrauben Güldner GmbH & Co. KG Niederstetten 100

Wagener & Simon WASI GmbH & Co. KG Wuppertal 100

WASI International GmbH Wuppertal 100

Greece

Inox Mare Hellas SA Thessaloniki 100

Italy

HSR Italia S.r.l. Verona 100

Inox Mare S.r.l. Rimini 100

Inox Tirrenica S.r.l. Fiumicino 100

Spinelli s.r.l Terlano 100

Romania

Wasi Romania S.R.L. Otopeni 100

Serbia

WASI d.o.o. Belgrade 100

Spain

WASI Hispania, S.A. Palau-Solità i Plegamans 100

Switzerland

Modal Inox AG Arlesheim 100

Turkey

InoxEgeMetalÜrünleriDisTicaretLimitedSirketi Beylikdüzü 100

SCREWS AND STANDARD PARTS

165


Würth Group share

in %

Denmark

WürthLeasingDanmarkA/S Kolding 100

Germany

InternationalesBankhausBodenseeAG Friedrichshafen 94

Waldenburger Versicherung AG Künzelsau 100

Würth Immobilien-Leasing GmbH & Co.KG Albershausen 100

Würth Leasing GmbH & Co. KG Albershausen 100

Würth Versicherungsdienst GmbH & Co. KG Künzelsau 100

Italy

Würth Leasing Italia S.r.l. Neumarkt 100


Würth Group share

in %

Luxembourg

Würth Reinsurance Company, S.A. Luxembourg 100

Netherlands

Würth Finance International B.V. ’s-Hertogenbosch 100

Switzerland

Würth Financial Services AG Rorschach 100

Würth Invest AG Chur 100

Würth Leasing AG Dietikon 100

FINANCIAL SERVICES


Würth Group share

in %

Austria

Würth Beteiligungen Ges.m.b.H. Böheimkirchen 100

Würth Leasing International Ges. m.b.H. Böheimkirchen 100

RuC Holding GmbH Böheimkirchen 100

China

Comgroup Information Technology (Shanghai)

Co., Ltd. Shanghai 100

Wuerth (China) Holding Co., Ltd. Shanghai 100

Germany

Reinhold Würth Holding GmbH Künzelsau 100

UNI ELEKTRO Handels- und Beteiligungs-GmbH Eschborn 100

WABCOWÜRTHWorkshopServicesGmbH Künzelsau 50

WOW ! Würth Online World GmbH Künzelsau 100

WUCATOMarketplaceGmbH Stuttgart 100

Würth IT GmbH Bad Mergentheim 100

Würth IT International GmbH & Co. KG Bad Mergentheim 100

Hungary

Würth Phoenix KFT Budaörs 100

India

Wurth Information Technology India Private Limited Pune 100


Würth Group share

in %

Italy

Würth Phoenix S.r.l. Bolzano 100

Mauritius

Wurth Electronics Midcom International Holdings

(Mauritius) LTD Port Louis 100

Slovakia

W.EGSlovenskos.r.o. Bratislava 100

Sweden

Autocom Diagnostic Partner AB Trollhättan 100

Switzerland

WürthElektronikInternationalAG Chur 100

Würth International AG Chur 99

Würth ITensis AG Chur 100

Würth Management AG Rorschach 100

United Kingdom

Wurth Holding UK Ltd Kent 100

USA

Wurth Electronics Inc. Ramsey,NewJersey 100

Wurth Group of North America Inc. Ramsey,NewJersey 100

Wurth Industry North America LLC Ramsey,NewJersey 100

Würth Wood-Division Holding LLC Ramsey,NewJersey 100

IT SERVICE AND HOLDING COMPANIES

166



Würth Group share

in %

Austria

marbet GmbH Vienna 100

China

Wuerth International Trading (Shanghai) Co., Ltd. Shanghai 100

Germany

EOS KSI Forderungsmanagement GmbH & Co. KG Künzelsau 50

FlugplatzSchwäbischHallGmbH SchwäbischHall 98

Marbet Marion & Bettina Würth GmbH & Co. KG Künzelsau 100

OTDOriginalteile-DirektGmbH Erlenbach 100

Panorama Hotel- und Service GmbH Waldenburg 100

WLCWürth-LogistikGmbH&Co.KG Künzelsau 100

Würth Aviation GmbH Künzelsau 100

Würth Inter Werbung GmbH Kissing 100

Würth Logistics Deutschland GmbH Bremen 100

Würth TeleServices GmbH & Co. KG Künzelsau 100


Würth Group share

in %

Slovakia

Würth International Trading s. r. o. Bratislava 100

Spain

FINCA INTERMINABLE, S.L. Maspalomas 100

marbet Eventos S. A. Barcelona 100

marbetViajesEspanaS.A. Barcelona 100

Switzerland

Lagerhaus Landquart AG Landquart 100

Würth Logistics AG Chur 100

Würth Promotional Concepts AG Chur 100

USA

Wurth International Trading America, Inc. Ramsey,NewJersey 100

Wurth Logistics USA Inc. Indianapolis, Indiana 100

DIVERSIFICATION


Würth Group share

in %

Australia

EDL Fasteners Pty. Ltd. EasternCreek 100

Austria

MetzlerGmbH Rankweil 100

Belgium

NormfestBeneluxSA/NV Zaventem 100

Würth Belux N.V. Turnhout 100

Brazil

Wurth Energia Solar do Brasil Ltda. Cotia 100

Bulgaria

Meister Bulgaria Sofia 100

China

marbet (Shanghai) events Co., Ltd. Shanghai 100

Midcom-Hong Kong Limited Hong Kong 100


Würth Group share

in %

China

munich one live communications Co., Ltd. Beijing 100

Würth(Shanghai)Hardware&ToolsCo.,Ltd. Shanghai 100

Cyprus

Wurth Cyprus Ltd. Nicosia 100

France

StelvioKontekS.A.S. Santeny 100

Germany

“METAFRANC”Möbel-u.Baubeschläge

Vertriebsgesellschaft mbH Wuppertal 100

Abraham Diederichs GmbH & Co. oHG Wuppertal 100

AHDAuto-Hifi&-DesignGmbH Künzelsau 100

E3EnergieEffizienzExpertenGmbH Künzelsau 100

ErbschloeWerkzeugVertriebsgesellschaftmbH Wuppertal 100

OTHER ENTITIES

167


Würth Group share

in %

Germany

ESBGrundstücksverwaltungsgesellschaftmbH Eschborn 100

EuroSun GmbH Freiburg im Breisgau 45

FANDUSGrundstücks-Vermietungsgesellschaft

mbH&Co.ObjektWillichKG Pullach im Isartal 94

GrassVerwaltungsGmbH Reinheim 100

GrundstücksgesellschaftBerlinChemnitzErfurtGbR Künzelsau 49

GrundstücksgesellschaftCottbusMagdeburgGbR Künzelsau 49

Hettich-VerwaltungsgesellschaftmbH Alpirsbach 100

KOSYGesellschaftzurFörderungdes

holzverarbeitendenHandwerksmbH Künzelsau 100

Meister-Werkzeuge,WerkzeugfabrikVertriebs-

gesellschaft mbH Wuppertal 100

MKTMetall-Kunststoff-TechnikBeteilungs-

gesellschaft mbH Weilerbach 100

nordberlinerElektro-Großhandels-GesellschaftmbH Eschborn 100

PIRUSGrundstücksgesellschaftmbH&Co.oHG Albershausen 100

PIRUSGrundstücks-VerwaltungsgesellschaftmbH Albershausen 100

Pronto-WerkzeugeGmbH Wuppertal 100

SchmittElektrogroßhandelGmbH Fulda 100

SCREXS GmbH Waldenburg 100

Sonderschrauben Hamburg GmbH Eiben & Co. Künzelsau 100

SYNFIBERAS&Co.beschränkthaftendeKG Worms 100

TUNAP Deutschland Vertriebs-GmbH Wolfratshausen 51

TUNAP Industrie Chemie GmbH Wolfratshausen 100

WPS Beteiligungen GmbH Künzelsau 100

WSS Würth Shared Services GmbH Künzelsau 100

WürthGmbH&Co.KGGrundstücksgesellschaft Künzelsau 100

Würth Logistic Center Europe GmbH Künzelsau 100

WürthMontagetechnikGmbH Dresden 100


Würth Group share

in %

Greece

Würth Solar Hellas Anonimi Eteria of Services for

Production of Electric Energy from Solar Energy Kryoneri,Attiki 100

India

HAHN+KOLBTOOLSChennaiPvtLtd Chennai 100

Italy

FINK S.r.l. Tramin 100

marbet Marion & Bettina Würth s.r.l. Leifers 100

Viterie Venete S.r.l. Rubano 100

Würth Solar Italia s.r.l. Campodarsego 100

Morocco

Würth Maroc SARL Casablanca 100

Netherlands

Normfest Nederland B.V. Well 100

Pakistan

WürthPakistan(Private)Limited Karachi 100

Spain

Isa Eolica S.L. Madrid 100

marbet Servicios Creativos S.A. Barcelona 100

WS Murcia Anbesol PM S.L. Madrid 100

WürthIndustrieLogistikEspanaS.A. Vitoria 100

Switzerland

Comgroup(Schweiz)AG Biel 100

United Kingdom

Anchorfast Limited Wednesbury 100

Monks&Crane(Holdings)Limited Wednesbury 100

WinzerWürthIndustrialLtd. Erith 100

USA

R. W. Ramsey Realty Corporation Ramsey,NewJersey 100

Session Solar USA, Inc. Ramsey,NewJersey 100

OTHER ENTITIES

168


L. The boards

Advisory BoardThe Advisory Board is the supreme supervisory and controlling body of the Würth Group. It advises on strategy, approves corporateplanningaswellastheuseoffunds.ItappointsthemembersoftheCentralManagingBoard,theExecutiveBoardaswellastheManagingDirectorsofthecompaniesgeneratinghighsales.

(as of: December 31, 2015)

Bettina WürthChairwomanoftheAdvisoryBoardof the Würth Group

Dr. Frank HeinrichtDeputy Chairman of the Advisory Board of the Würth GroupChairman of the Management Board SchottAG,Mainz

Peter EdelmannManaging Partner of Edelmann & Company, Ulm

Hartmut JennerChairman of the Management ofAlfredKärcherGmbH&Co.KG,Winnenden

Wolfgang KirschChiefExecutiveOfficerof DZBANKAG,Frankfurt/Main

Dr. Bernd-Albrecht von Maltzan(Member of the Advisory Board up until December 31, 2015) Former Divisional Board Member DeutscheBankAG,Frankfurt/Main

Jürg MichelFormer Member of the Central Managing Board of the Würth Group

Ina SchlieHead of Group Tax at SAP SE, Walldorf Member of the Supervisory Board and Chair of the Audit Committee at QSC AG, Cologne

Dr. Martin H. SorgCertifiedPublicAccountantandPart-nerofthelawfirmBinz&Partner,Stuttgart

Honorary Chairman of the Advisory Board

Prof. Dr. h. c. mult. Reinhold WürthChairman of the Supervisory Board oftheWürthGroup’sFamilyTrusts

Honorary members of the Advisory Board

Rolf BauerFormer Member of the Central Managing Board of the Würth Group

Dr. Michael Rogowski(Honorary member of the Advisory Board up until December 31, 2015) Chairman of the Foundation Board of Hanns-Voith-Stiftung, Heidenheim

Dr. Bernd ThiemannFormer Chairman of the Management Board of Deutsche GenossenschaftsbankAG, Frankfurt/Main

169

Robert FriedmannChairman of the Central Managing Board of the Würth Group

Peter ZürnDeputy Chairman of the Central Managing Board of the Würth Group

Bernd HerrmannMember of the Central Managing Board of the Würth Group(since May 1, 2015)

Joachim KaltmaierMember of the Central Managing Board of the Würth Group

Uwe HohlfeldMember of the Central Managing Board of the Würth Group(up until April 30, 2015)

Central Managing Board TheCentralManagingBoardisthemostseniordecision-makingboardoftheWürthGroup.Ithasfourmembersandiscom-parable to the management board of a group holding company. Its most important duties include corporate strategy planning, theselectionofexecutivesaswellasthemanagementofstrategicbusinessunitsandfunctions.

170


Executive Board The Executive Vice Presidents constitute the operational management of the Würth Group. Each of the members is in charge of one strategic business unit or responsible for one functional area.

Joachim BreitfeldChemicals Group

Rainer BürkertWürth Line Industry (excl. USA),Würth Line China, Asia and Oceania

João CravinaWürth Line South America and Portugal

Dr. Steffen GreubelWürth Line Italy, Corporate Development

Ulrich Häfele / Ernst WiesingerRECA Group

Norbert HeckmannWürth Line Craft Germany, Chairmanof Adolf Würth GmbH & Co. KG

Michel KernWürth International AG

Thomas Klenk Purchasing and product, Anchor production

Jürgen Klohe / Jörg MurawskiWürthElektronikGroup

Andreas KräutleTools Companies

Svein OftedalWürth Line UK, Ireland, Scandinavia (excl. Finland) and Africa

Pentti RantanenWürth Group Finland and the Baltic States

Uwe Schaffitzel / Ulrich LiedtkeElectrical Wholesale

Dr. Reiner SpechtWürth Line Russia and Sub-Regions of Southern and Western Europe, Trade Unit, Deputy Member of the Central Managing Board of the Würth Group

Ulrich SteinerDIN/StandardStainlessSteelParts

Robert StolzWürth Line Auto USA,Würth Line Wood USA and Canada

Marc StrandquistWürth Line Industry America

C. Sylvia WeberDirectorofMuseumWürth/KunsthalleWürth, Curator of the Würth Collection

Mario WeissWürthLineEasternEurope,BalkanStatesand the Middle East

Alois WimmerProductionofScrewsandAnchors

Markus WürthFittings Manufacturers

171

The following audit opinion was issued by the Group auditor on the full consolidated financial statements including the list of shareholdings and the Group management report:

“WehaveauditedtheconsolidatedfinancialstatementspreparedbytheWürthGroup,Künzelsau,comprisingthecon-solidatedincomestatement,theconsolidatedstatementofcomprehensiveincome,theconsolidatedstatementoffinancialposition,theconsolidatedstatementofcashflows,theconsolidatedstatementofchangesinequityandthenotesontheconsolidatedfinancialstatements,togetherwiththeGroupmanagementreportforthefiscalyearfromJanuary1toDecem-ber31,2015.ThepreparationoftheconsolidatedfinancialstatementsandtheGroupmanagementreportinaccordancewithIFRSasadoptedbytheEU,aswellastheadditionalrequirementsofGermancommerciallawpursuanttoSec.315a(1)HGB[‘Handelsgesetzbuch’:GermanCommercialCode]aretheresponsibilityoftheCentralManagingBoardoftheWürthGroup.OurresponsibilityistoexpressanopinionontheconsolidatedfinancialstatementsandtheGroupmanage-mentreportbasedonouraudit.InadditionwehavebeeninstructedtoexpressanopinionastowhethertheconsolidatedfinancialstatementsfullycomplywithIFRS.

WeconductedourauditoftheconsolidatedfinancialstatementsinaccordancewithSec.317HGBandgenerallyacceptedGermanstandardsforauditingfinancialstatementspromulgatedbytheInstitutderWirtschaftsprüfer[InstituteofPublicAuditorsinGermany](IDW).Thosestandardsrequirethatweplanandperformtheauditsuchthatmisstatementsmate -riallyaffectingthepresentationofthenetassets,financialpositionandresultsofoperationsintheconsolidatedfinancialstatementsinaccordancewiththeapplicablefinancialreportingframeworkandintheGroupmanagementreportaredetectedwithreasonableassurance.KnowledgeofthebusinessactivitiesandtheeconomicandlegalenvironmentoftheGroupandexpectationsastopossiblemisstatementsaretakenintoaccountwhendeterminingauditprocedures.Theeffectivenessoftheaccounting-relatedinternalcontrolsystemandtheevidencesupportingthedisclosuresintheconsoli-datedfinancialstatementsandtheGroupmanagementreportareexaminedprimarilyonatestbasiswithintheframeworkoftheaudit.Theauditincludesassessingtheannualfinancialstatementsofthoseentitiesincludedinconsolidation,thedeterminationofentitiestobeincludedinconsolidation,theaccountingandconsolidationprinciplesusedandsignificantestimatesmadebymanagement,aswellasevaluatingtheoverallpresentationoftheconsolidatedfinancialstatementsand management report. We believe that our audit provides a reasonable basis for our opinion.

Our audit has not led to any reservations.

Inouropinion,basedonthefindingsofouraudit,theconsolidatedfinancialstatementscomplywithIFRSasadoptedbytheEU,theadditionalrequirementsofGermancommerciallawpursuanttoSec.315a(1)HGBandtheIFRSasawholeandgiveatrueandfairviewofthenetassets,financialpositionandresultsofoperationsoftheGroupinaccordancewiththeserequirements.TheGroupmanagementreportisconsistentwiththeconsolidatedfinancialstatementsandasawholeprovidesasuitableviewoftheGroup’spositionandsuitablypresentstheopportunitiesandrisksoffuturedevelopment.”

Stuttgart, March 11, 2016Ernst & Young GmbHWirtschaftsprüfungsgesellschaft

Prof. Dr. Wollmert BleschAuditor Auditor

AUDIT OPINION OF THE INDEPENDENT AUDITOR

Published byWürth Group

Adolf Würth GmbH & Co. KGReinhold-Würth-Straße12-1774653KünzelsauGermany

Content responsibilityRobert Friedmann and Joachim Kaltmaier

Editorial officeSigrid Schneider (editor-in-chief), Maria Theresia Heitlinger,SilkeHofmann,SusanneHornburg, CaraMärcklin,SonjaRauh,RalfSchaich,MartinaSkibowski,ClaudiaZürn

Theeditorialteamwouldliketothankthemanypeo-plewhohelpedpreparethisAnnualReport.

AlloftheinformationinthisAnnualReportwasmadeavailable by Adolf Würth GmbH & Co. KG and its affiliatedcompaniesandisforinformationpurposesonly.Noliabilityorwarrantyisassumed/providedfor the accuracy of the information.

This Group Annual Report is also published in Ger-man. The German version shall prevail.

The German and English versions of this Annual Report and further information about the Würth Group can be found on the Internet at:www.wuerth.com

Part of the concept and realization (pp. 1–17)HoheLuftVerlagUG(haftungsbeschränkt)&Co.KG

Designed and realized byScannerGmbH,Künzelsau

Edited byInaChristov,ZacharyMühlenweg,SonjaRauh

Printed byW.KohlhammerDruckereiGmbH&Co.KG,Stuttgart

IllustrationsCarolin Löbbert

Photo creditsAbt Sportsline GmbH (p. 29)DavidChipperfieldArchitects(p.21)Jupiterimages© (p. 57)Andreas Lechner (p. 24)Scanner GmbH (pp. 47–49, 51–54, 56, 59)Andi Schmid (p. 19)Philipp Schönborn (p. 20)Wolfgang Uhlig (pp. 30, 32, 36)Bernhard Zinnau (p. 28) Würth archive (pp. 15, 23, 25, 27, 47, 48, 55, 58)

©WürthGroup,Künzelsau©VGBild-Kunst,Bonn2016fortheworkof Michael SailstorferPrinted in Germany. All rights reserved.Reprint,inwholeorinpart,issubjecttopriorapproval.

1GFU–HLV–SC–KO–2.5‘-05/16

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Contact detailsCorporate Communicationsof the Würth GroupPhone +49794015-1186Fax [email protected]

www.wuerth.com

Annu

al R

epor

t of t

he W

ürth

Gro

up 2

015

CONTENTS

1 UNDERSTANDING VALUE

16 COMMITMENT

18 Experiencing art and culture 22 Sharing commitment 26 Shaping education

30 BULLETIN

30 Report of the Advisory Board 32 Report of the Central Managing Board

34 THE BOARDS

34 Legal and organizational structure of the Würth Group 35 Advisory Board 36 Central Managing Board 38 Customer Advisory Board

39 GROUP MANAGEMENT REPORT

39 The Würth Group 40 Economic environment 41 Business development

42 Sales by region

46 The business units of the Würth Group

46 The divisions of the Würth Line

50 The units of the Allied Companies 51 Electrical Wholesale unit

52 Trade unit 53 Production unit

54 Electronics unit 55 RECA Group unit 56 Tools unit

57 Chemicals unit 58 Screws and Standard Parts unit

59 Financial Services unit

60 Net assets, fi nancial position and results of operations 66 Research and development 69 Risk and opportunities report 75 Employees 78 Corporate governance report 79 Subsequent events 79 Outlook

81 CONSOLIDATED FINANCIAL STATEMENTS

82 Consolidated income statement 83 Consolidated statement of comprehensive income 84 Consolidated statement of fi nancial position 86 Consolidated statement of cash fl ows 88 Consolidated statement of changes in equity 89 Consolidated value added statement 90 Notes on the consolidated fi nancial statements

AT A GLANCE »

ANNUALREPORT Würth Group Fiscal Year 2015

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